Can home & appliance repair contractors get PPP loans? (Important PPP update)

In this 4-minute read:

  • Can home & appliance repair contractors get the PPP loan?
  • Other PPP loan eligibility requirements home repair contractors should be aware of
  • PPP loan updates that can help home & appliance repair contractors get more funding
  • Additional PPP loan resources for home & appliance repair contractors

The Paycheck Protection Program was put in place in the spring of 2020 to help small businesses across the U.S. through the financial hardship of the coronavirus pandemic. Millions of small businesses were able to take advantage of this program in 2020 to receive forgivable loans that helped them keep operations going or employees paid during shutdowns. 

In many places, the financial challenges of COVID-19 still linger and continue to impact America’s small businesses. For this reason, the PPP application window has been extended until May 31, 2021, and some recent updates have been made to the program to give more of an advantage to the smallest of businesses, especially independent contractors and those who file taxes using Schedule C (form 1040).  

Where do home and appliance repair contractors fit into the mix? Are you eligible to participate in this program and receive forgivable funds? 

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Can home & appliance repair contractors get PPP loans?

Home and appliance repair contractors can apply for and receive the PPP loan if their employment status allows for it. To apply for the loan you must be a business owner, sole proprietor, independent contractor, or self-employed individual—and you must have the documentation to verify that classification. 

Most contractors report their income using a 1099-MISC or Form 1040 Schedule C. If you fall into that category, then you check off the first box for being able to apply for the PPP loan. 

If you are not technically an independent contractor or otherwise self-employed individual and you receive a W2 from your employer each year to report your income, then you would not be eligible for this loan. However, your employer may be and could apply to help the business and make sure you and your co-workers receive similar compensation to past years. 

PPP loan updates that can help home & appliance repair contractors get more funding

Recent updates to the Paycheck Protection Program may give home appliance and repair contractors an extra advantage. 

  • If you were delinquent on school loans in 2020, you were not able to apply for the PPP loan. That rule has been lifted so individuals who are delinquent on school loan payments can now apply for the loan
  • The PPP loan in now available to non-citizen businesses who are lawful residents and have an ITIN
  • MOST IMPORTANTLY: If you report your income using IRS Form 1040 Schedule C, you can now use your GROSS (instead of net) profits to determine your max loan amount. This can impact how much you are able to borrow depending on how you’ve previously reported your profits. For more information, read about the latest 1040 Schedule C/PPP loan rule changes

Other PPP loan eligibility requirements home repair contractors should be aware of

For 2021 the rules and restrictions for getting PPP loans are simplified and optimized for smaller businesses, contractors, and sole proprietors, but you must still meet a few basic requirements in order to be eligible to apply for the PPP loan. And it’s important to know that there are different circumstances under which you may apply. Currently, applicants can apply for first or second draw PPP loans. A first draw loan is the first PPP loan you receive, and a second draw PPP loan is what you’d apply for if you’ve already received a PPP loan. 

Eligibility requirements for first draw loans (this is not a complete list of requirements, but if you’re a small business, sole proprietor, or contractor it’s pretty simple to qualify for a PPP loan at the moment):

  • You must have been in business as of February 15, 2020 (along with having the right employment classification)

Our First Draw Eligibility FAQ provides a more exhaustive list of requirements, including special circumstances. 

Eligibility requirements for second draw loans:

  • You must have received a PPP loan previously (since this is a “second draw” loan)
  • Your funds from your first draw loan must be spent on approved expenses by the time your second draw loan disbursement comes through
  • You must be able to substantiate a revenue reduction of at least 25% in any quarter of 2020 when compared to 2019
  • (You must have fewer than 300 employees)

Our Second Draw Eligibility FAQ provides additional insights and special circumstances that may apply.  

Additional PPP loan resources for home & appliance repair contractors

We have produced several articles and helpful resources just for independent contractors and small businesses to guide you through the PPP loan process. Check these out:

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