Can insurance agents get PPP loans? (Plus important 2021 rules updates)

In this 4-minute read:

  • Can insurance agents and franchise owners apply for PPP loans?
  • What are the PPP loan eligibility requirements?
  • Important updates to the PPP loan under the Biden administration
  • Additional PPP loan resources for independent contractors and sole proprietors

With all the talk about the PPP Extension Act of 2021 recently, there’s been a little confusion about who can actually apply for PPP loans.

The Paycheck Protection Program was originally put in place to help keep the economy going by helping small business owners and their employees through the financial hardships of the coronavirus pandemic. However, independent contractors, sole proprietors, gig workers, and self-employed individuals can also apply for the forgivable PPP loans provided through this program. 

But what does that mean for insurance agents, owners, and franchises?

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Can insurance agents and franchise owners apply for PPP loans?

Yes, depending on your business structure and employment status you may be able to apply for PPP loans as an insurance agency owner, insurance franchise, or independent insurance agent. There may be instances where insurance agents are classified by their company as employees, rather than as independent contractors, sole proprietors, or business owners, in which case you wouldn’t qualify for the PPP loan. If you get a W-2 from an employer, you don’t qualify for a PPP loan unless you do additional 1099/contract work on the side.

However, if you own your own insurance agency or independent franchise, or are an eligible business type (S or C corp, partnership etc.), independent contractor, sole proprietor, consultant, freelancer, or otherwise self-employed, you absolutely may qualify to get PPP loans. 

Many insurance agents are set up as independent contractors and receive a 1099-Misc for reporting their income, and often file IRS Form 1040 Schedule C. If you fall into that category, you should definitely take advantage of the PPP program.

What are the relevant PPP loan eligibility requirements for independent insurance agents and owners?

Beyond just being an eligible business owner/partner, independent contractor, sole proprietor, or self-employed individual, there are some additional requirements to be aware of if you want to apply for a PPP loan. 

Currently (until May 31, 2021), the SBA is accepting new applications for first and second draw PPP loans. A first draw loan is just that—you are applying for the PPP loan for the first time and haven’t previously received funding under this program. A second draw loan is when you are applying for the PPP loan for a second time (this became available in January 2021).

Basic eligibility requirements for first draw PPP loans (this is not an exhaustive list):

  • You’re an independent contractor, sole proprietor, or self-employed (additional requirements apply if you have employees)
  • You must have been in business as of February 15, 2020

Check our first draw PPP loan eligibility FAQ for special circumstances that may apply. 

Additional eligibility requirements for second draw PPP loans:

  • You previously received a PPP loan
  • You must have used your previous PPP loan funds on authorized uses by the time your second draw loan is disbursed
  • You must be able to demonstrate a revenue reduction of at least 25% in any quarter of 2020 when compared to 2019

You may also like: How should I spend PPP loans to get full forgiveness?

Go deeper: How to get your PPP loan forgiven.

See the 2021 new PPP loan and forgiveness applications.

Important 2021 updates to the PPP loan for insurance agents who are self-employed/independent contractors

As a insurance agent/owner, these recent updates to the PPP loan rules may be of help for you. 

Additional PPP loan resources for independent insurance agents working as contractors or sole proprietors

Recent PPP changes benefit independent contractors and make it easier to get PPP loans and apply for forgiveness (including you as a insurance agent if you fall into that category). 

Check out these resources for more information on PPP loans:

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