Can “cleaning ladies” and housekeeping services get PPP loans? (2021 rules!)

In this 7-minute read:

  • Can housekeepers, maids, cleaning ladies, and others get the PPP loan?
  • PPP loan updates for 2021 that can help housekeepers and cleaning services businesses qualify for more funding
  • Maximum loan calculation for housekeepers, maids, custodians and more
  • How can housekeepers spend their PPP funds to receive loan forgiveness?
  • Remember to apply for PPP loan forgiveness with your lender

More businesses and self-employed individuals are able to apply for the PPP loan as we approach the May 31, 2021 deadline. The Paycheck Protection Program was set up to help America’s small businesses during this unpredictable time, and if you’re eligible, you should take full advantage of this assistance. 

As an independent housekeeper, maid, “cleaning lady,” or other type of home cleaning service provider, you may be eligible to receive this forgivable loan. Read on to learn more.

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Can housekeepers, maids, cleaning ladies, and service providers get PPP loans?

There are specific rules in place for who is allowed to apply for the PPP loan. The first rule that every applicant must meet is that they are a small business owner, independent contractor, sole proprietor, or eligible self-employed individual. And you must be able to back that up with your tax filings from either 2019 or 2020 (most self-employed individuals will use an IRS Form 1040 Schedule C). 

If you are employed by a housekeeping company and receive a W2 for your cleaning work, then you wouldn’t be eligible to apply for the PPP loan with that job. However, if you own or run any other side business or independent contract work for which you do file your own self-employment or business taxes, then you can likely apply for the PPP loan with that job. 

Check out these additional requirements before you apply just to be sure you are eligible:

  • First draw loan borrowers (this is your first PPP loan) must have been in business as of February 15, 2020 and meet the minimum earning threshold of $4800 on an annualized basis
  • Second draw loan borrowers (this is your second PPP loan) must have already received the PPP loan and spent it on authorized uses before they receive their second draw funding, must be able to show a revenue reduction of at least 25% when comparing any 2020 quarter to 2019, and must have fewer than 300 employees

For a more exhaustive list of eligibility requirements and special circumstances that may apply, check out our PPP FAQ

2021 PPP loan updates that can help housekeepers, maids, cleaning ladies, and custodial service providers get more funding

The Biden-Harris administration announced some new changes in 2021 that can help housekeepers and other self-employed individuals have the opportunity to apply and qualify for more funding with the PPP loan:

  • IRS 1040 Schedule C borrowers can now choose to use their gross profits (instead of net profits) to calculate their maximum loan amount  for the PPP loan. This can make the difference for many individuals in pushing them past that minimum earning threshold and allowing them to qualify for a PPP loan
  • Borrowers who are delinquent on their student loan payments are now eligible to apply for the PPP loan
  • Non-citizen borrowers who are lawful residents and have an ITIN may also apply for the PPP loan

Maximum loan calculation for housekeepers, maids, cleaners, custodians and more

You won’t be able to apply for an unlimited amount of PPP funding, even if you think more would be better for your business (and who doesn’t!). There’s a calculation in place that small businesses, independent contractors, sole proprietors, and self-employed people must follow to determine their maximum loan amount. 

Follow these steps to calculate your maximum loan amount if you are one of these types of businesses and don’t have employees:

  1. Gather your 2019 or 2020 IRS Form 1040 Schedule C (you can choose which year to use). Find line 7 for your gross profits and use that number for the rest of the calculation. If the number on line 7 exceeds $100,000, you’ll need to lower it to $100,000. 
  2. Take the number from step 1 and divide that by 12 to get your monthly average profits. 
  3. To get your maximum loan amount, multiply your average monthly profits by 2.5.
  4. If this applies, you may also add any outstanding amount of the Economic Injury Disaster loan made between January 31, 2020 and April 3, 2020 to your maximum loan amount. 

Do you employee W2 housekeepers or maids for your housekeeping services business? Use our FAQ to learn how to calculate your maximum loan amount if you have employees.

How can housekeeping service providers and cleaning ladies spend their PPP funds to receive full loan forgiveness?

In order to receive loan forgiveness, you have to spend your PPP funds in the correct way. The SBA has approved expenses for all businesses using this program, and we’ve outlined what those expenses might look like for individuals in the housekeeping/cleaning game. 

Payroll and income

The first big rule of spending your PPP loan is that at least 60% of it must go towards payroll and income. If you are self-employed and don’t have any employees, you may use that entire amount (up to the full loan amount) towards your own income. If you do have employees, you’ll need to use this amount to help keep them on staff and maintain their current compensation. 

Other approved business expenses

There are several other approved expenses for which you can use the PPP loan in order to help your business continue operations. 

  • Mortgage, rent, or utilities: any payments on these items for dedicated office space or business property. If you operated out of your home you can use the PPP loan to help pay any portion of these expenses that you would deduct from your business taxes
  • Interest payments on debts: any interest payments on debts related to your business (credit cards, vehicle loan, business loan, etc.)
  • Operational expenses: this includes payments for business software or cloud computing services that help facilitate your operations—payment processors, invoicing, inventory tracking, and other sales and billing functions
  • Supplier costs: any payments for purchase orders or contracts with suppliers that were in place before the first day of your covered loan period
  • COVID-19 protection: any significant expenses for PPE, sneeze guards, or other items that you’ve acquired in order to adhere to public health guidelines to keep yourself, employees, or customers safe
  • Property damages: any costs that weren’t covered by insurance from property damages that occurred as a results of the 2020 public disturbances and riots

As you receive your PPP loan, or even as you start the application process, be thinking about how you will spend your funds. Planning this out can help you prepare for tracking your expenses. You’ll need to provide verifying documents to show how these funds were used if you wish to receive full loan forgiveness.

You might like: Tracking PPP expenses to maintain forgiveness (tools and tips!) 

Remember to apply for PPP loan forgiveness

After you have used your PPP funds appropriately (and after the last day of your covered loan period), you’ll have 10 months to apply for loan forgiveness.

To apply for loan forgiveness, you should first check if your lender has opted-in to the new SBA PPP Direct Forgiveness Portal. If your PPP loan was for $150,000 or less, AND if your lender has opted-in to the use of the platform, you will be able to submit your PPP loan forgiveness application online directly to the SBA, using the electronic equivalent of SBA Form 3508S. For full details, read our post about the new SBA PPP Direct Forgiveness Portal and other recent rule changes.

If the above doesn’t apply to you, contact your PPP lender and complete the correct application form. When you are ready to apply, just ask your lender for the application and they’ll make sure you get the right one. 

All communication for loan forgiveness will be between you and your lender (unless you qualify for the SBA PPP Direct Forgiveness Portal; see above), so turn the application back into them once it’s filled out, along with any documentation to verify your expenditures. Your lender will then turn all of that over to the SBA to make a decision. Once a decision has been made, your lender will notify you. 

Note: many lenders are using electronic systems to help you complete your PPP loan and forgiveness applications. Be sure to talk to your lender about their process and follow their instructions.

If you have more questions about loan forgiveness, check out these resources:

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