How to calculate the maximum PPP loan amount for self-employed farmers
April 28, 2020
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.
Womply is acting as a facilitator to connect American small businesses to SBA-authorized lenders to get emergency loans for COVID-19 relief. Start your free application here, or call us at 855-208-8813 for a free consultation.
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 IRS Forms for net profits
You’re going to use the your 1040 tax forms for 2019 to calculate your 2019 net profit (even if you haven’t filed your 2019 taxes yet). Most self-employed farmers use IRS Form 1040 Schedule 1 and Schedule F. Find line 34 on your Schedule F form and note the total amount listed.
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
Take the amount from line 34 of your Schedule F form and divide it by 12. That will give you your average monthly 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
Haven’t applied for the PPP loan? It’s not too late, but HURRY
You can still apply for the PPP loan for your farm, but we strongly suggest that you do so quickly as the first round of funding for this program has already run out and the second round is going fast.
Womply can help you through the application process too. Womply is a verified loan facilitator working with SBA 7(a) approved lenders who are still accepting applications for the PPP loan.
Give us a call at 855-208-8813 for a free consultation or click here to start your free application.
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