IMPORTANT UPDATE FOR 2021: Congress has approved an extension of the PPP loan program until March 31, 2021, including “second draw” PPP loans for businesses that received PPP funding in 2020. Please click for more details about PPP loans.
In this 2-minute read:
- How to calculate max PPP loan amount for self-employed farmers
Just like most other businesses across America, independent, self-employed farmers are seeing the financial impacts of the COVID-19 pandemic. If your farm has been affected by this crisis, you can apply for a loan under the Paycheck Protection Program in order to receive some funding to help your through this difficult time.
We’ll guide you through how to calculate the maximum amount you can request from the PPP loan for your farm.
Contract workers, gig workers, drivers, and self-employed people can qualify for up to $41,666 in forgivable PPP loans! We built Fast Lane as a simple, 5 minute process to help you get your PPP application submitted ASAP. Start your free PPP application now!
How to calculate PPP loan amount for self-employed farmers
Because farms are a different type of business from a traditional brick and mortar office or store with employees, there are some different steps for you to take when calculating your loan amount.
Step 1: Locate your 2019 or 2020 IRS Forms for net profits
You’re going to use the your 1040 tax forms for 2019 and/or 2020 to calculate your net profit (even if you haven’t filed your 2020 taxes yet). Most self-employed farmers use IRS Form 1040 Schedule 1 and Schedule F.
Your IRS Form 1040 Schedule 1 and Schedule F must be included with your PPP loan application.
Step 2: Calculate the monthly net profit from your farm
The calculation for self-employed farmers and ranchers without employees is the same as for Schedule C filers that have no employees, except that Schedule F line 9 (gross income) should be used to determine the loan amount rather than Schedule C line 31 (net profit).
Step 3: Multiply your monthly net profit by 2.5
Farm businesses can request up to 2.5 times the amount of their average monthly profit.
Step 4: Include any outstanding EIDL loans
Any businesses that applied for an Economic Injury Disaster Loan (EIDL) can add the outstanding amount of the loan to their PPP loan request.
Do not include any “advance” of your EIDL loan that you have received for COVID-19 in your request, as that portion doesn’t have to be repaid.
Example calculation for self-employed farmers with an outstanding EIDL loan:
Annual net profit: $72,000
Average monthly net profit: $6,000
Multiply by 2.5: $15,000
Add outstanding EIDL loan amount of $5,000
Total amount to request: $20,000
Read more in our FAQ for PPP loan for self employed farmers.
PPP Fast Lane simplifies the application process and helps you get up to $41,666 in forgivable stimulus funding!
Contractors, gig workers, sole proprietors, and eligible self-employed individuals can qualify for up to $41,666 in forgivable PPP loans for 2021! We built Fast Lane for you.
- Simple, five minute data collection process
- Guides you through every step along the way
- Automated first and second draw loan applications
- Automated first and second draw forgiveness applications