Can real estate agents get PPP loans? (important changes for 2021!)

In this 4-minute read:

  • Can real estate agents apply for PPP loans?
  • Are there any other PPP loan eligibility requirements?
  • Important updates to the PPP loan under the Biden administration
  • Additional PPP loan resources for contractors

There’s been a little confusion about who can actually apply for PPP loans. With all that’s going on in the world, every business could use a little financial reprieve, and that’s what the PPP loan is intended to do. 

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

But what does that mean for real estate agents?

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Can real estate agents apply for PPP loans?

Depending on your employment status you may be able to apply to receive a PPP loan as a realtor or real estate agent. Most real estate agents are classified as independent contractors and receive a 1099-Misc for the taxes, and often file IRS Form 1040 Schedule C. If you fall into that category, you are absolutely eligible for this program. 

In fact, the Biden administration has announced important PPP changes for Schedule C filers. On February 22, 2021, the Biden-Harris administration announced a rule change that allows PPP borrowers who file using IRS Form 1040 Schedule C to use GROSS profits, rather than NET profits, to calculate their maximum PPP loan amount. Read more here, and see the new rules, and the new PPP application form for Schedule C applicants.

There are few instances where real estate agents are classified by their broker as an employee, rather than an independent contractor, in which case you wouldn’t qualify for the PPP loan, but your employer absolutely should apply. You must be a business owner or other eligible business type (partnership, non-profit, etc.), independent contractor, sole proprietor, consultant, freelancer, or otherwise self-employed. 

What are the relevant PPP loan eligibility requirements for independent real estate agents?

Beyond just being a business owner or independent contractor, there are some additional requirements to be aware of if you want to apply for a PPP loan. 

Currently, you can apply for a first or second draw PPP loan. A first draw loan is just that–you are applying for the PPP loan for the first time and haven’t previously received these funds. 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

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

As a real estate agent, these recent updates to the PPP loan may be a help for you. 

  • Previously, applicants with student debt delinquency could not apply for the PPP loan. This hold has now been removed
  • Non-citizen businesses that are lawful residents and file using an ITIN can now apply for PPP loans
  • Applicants who file using IRS Form 1040 Schedule C will be able to use their GROSS profits rather than net profits to determine their max loan amount. Read more here.

Additional PPP loan resources for independent contractors

With all of the questions lingering for independent contractors (including you as a real estate agent if you fall into that category), we wanted to help provide clarity and resources to help you understand this program better. 

Check out these resources for more information on PPP loans:

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