There’s a lot of news out there right now, and it can be overwhelming during these uncertain times. IMAGE Studios is sorting through the noise to help you understand what it means for you & your business.
More PPP funding expected: Apply to be first in line
The government is expected to pass a new stimulus package this week which includes an additional $310 billion for the Paycheck Protection Program (PPP), providing more sole proprietors, independent contractors, self-employed, and small businesses with the opportunity to receive the forgivable loan. With a high demand for PPP funds, it is likely that the additional funds will be distributed quickly. Many applications are already lined up to receive the next round of funding, so it is recommended that you apply as soon as possible to get your application in line. It’s highly recommended that you apply through your bank, as people with accounts get preferential treatment during this process.
What is the PPP?
PPP loans are part of the COVID-19 government stimulus program (CARES Act) and are made to help sole proprietors, independent contractors, self-employed, and small businesses cover payroll and other business expenses like rent and utilities. The original funds were quickly exhausted, and more are expected to be distributed soon. This includes payroll for yourself, even if you have 0 employees. When used for qualifying expenses, you may be eligible for a 100% forgiveness grant, meaning you wouldn’t need to pay it back if you meet their criteria (find more info here).
Am I eligible for the PPP if I don’t have any employees?
Yes, you can still apply for the PPP. Even if you’re a sole proprietor, independent contractor, or self-employed, and have no employees, you can apply. Your own net earnings count as qualifying payroll costs, which you can find on your 2019 Form 1040-C.
How do I prove my payroll costs?
Depending on your type of business, you can use your 2019 Form 940/941, 1040-C, K-1, tax returns or W-2 statements (if you issue them).