How to calculate the maximum PPP loan amount for self-employed farmers


Congress has approved an extension of the PPP loan program, and applications may be submitted to SBA until May 31, 2021, including “second draw” PPP loans for businesses that received PPP funding in 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. 

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How to calculate PPP loan amount for self-employed farmers without employees

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.

Max PPP loan calculations for self-employed farmers or ranchers with employees

Your PPP loan calculation will be the same as Schedule C filers with employees, with several exceptions. 

That calculation will look something like this:

  1. Compute your 2019 or 2020 payroll by adding the following:
    • The difference between IRS Form 1040 Schedule F line 9 (gross profit) and the sum of Schedule F lines 15, 22, and 23 (employee payroll). If this amount is over $100,000, reduce it to $100,000;
    • Gross wages and tips paid to your employees whose principal place of residence is in the United States, computed using IRS Form 943 from each quarter, plus any pre-tax employee contributions for health insurance or other fringe benefits excluded from taxable Medicare wages & tips; subtract any amounts paid to any individual employee that exceeds $100,000 on an annualized basis and any amounts that are paid to employees whose principle place of residence are outside of the United States; and 
    • Employer contributions to employee group health, life, disability, dental, and vision insurance (portion of Schedule F line 15 attributable to those contributions); retirement contributions (Schedule F line 23); and state and local taxes assessed on employee compensation. 
  2. Take the number that you got in Step 1 and divide that by 12 to get your average monthly amount. 
  3. Multiply your average monthly amount by 2.5.
  4. Add any outstanding amount of an EIDL made between January 31, 2020 and April 3, 2020 that you wish to refinance. Do not include any advance from your EIDL since that doesn’t have to be repaid. 

If you have employees, your maximum loan amount cannot exceed $10 million for first-draw PPP loans.

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