How to calculate your maximum PPP loan amount: self-employed with no employees

Important PPP update for 2021

On December 22, 2020, Congress passed a bill renewing funding under the CARES Act, including an additional $284 billion earmarked for America’s struggling small businesses. The rules and application process for PPP loans and forgiveness have been modified, with more businesses eligible for PPP loans, more expenses forgivable, and a simplified application process. Also there is provision for “second draw” PPP loans for businesses that received PPP funding in 2020. Start your PPP loan application now!

In this 2-minute read:

  • Maximum PPP loan amount allowed for self-employed individuals or independent contractors with no employees

The Paycheck Protection Program allows small businesses with fewer than 500 employees (and in some cases, more than 500 employees) to take out loans to help them through the financial struggles of the COVID-19 crisis. This includes independent contractors, sole proprietors, and business owners that don’t have any employees. 

This article will help you calculate the maximum amount that your business can take out for your PPP loan if you are self-employed without any employees.

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!

If I don’t have any employees, how do I calculate how much I can borrow for PPP loans?

Independent contractors, self-employed individuals, and sole proprietors have to calculate their payroll expenses a little differently from the traditional small business owner that does have hired employees. (If you have employees, read this guide.)

Follow these steps to calculate the maximum amount that you can request for your PPP loan. 

Step 1: Find your 2019 or 2020 IRS Form 1040 Schedule C

Take line 31 from your 2019 or 2020 IRS Form 1040 Schedule C. This should be your net profit from 2019 or 2020 . 

If you haven’t filed your 2020 tax returns yet, then fill it out to determine that value. 

If that amount is more than $100,000, reduce your total net profit to $100,000 (more than this is not allowed for an annual salary amount under the PPP loan). 

If your net profit is zero or less, you do not qualify for a PPP loan. 

Step 2: Calculate your average monthly net profit

Take the amount you gathered in Step 1 and divide it by 12. This will give you your average monthly net profit from the last year. 

Step 3: Multiply your average monthly net profit by 2.5

For the PPP loan, you are allowed to request 2.5 times the amount of your average monthly net profit in order to help you through the 8-24 weeks after you receive your loan. 

Step 4: Add any outstanding EIDL loan amount to your total

If you applied for an Economic Injury Disaster Loan (EIDL) between January 1, 2020 and April 3, 2020, then you can add any amount of that loan to your PPP loan request. 

Do not include any amount of any EIDL “advance” that you have received under COVID-19 (since it doesn’t have to be repaid). 

Here’s an example of what that calculation might look like if you have an outstanding EIDL loan:

Annual net profit: $48,000 (no employees, and your annual profits don’t exceed $100,000)
Average monthly net profit: $4,000
Multiply by 2.5: $10,000
Add outstanding EIDL loan amount of $5,000
Total amount to request for PPP loan: $15,000

1099s, independent contractors, and self-employed individuals can qualify for up to $41,666 in PPP stimulus funding. PPP Fast Lane simplifies the application process!

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

 Put your PPP application in the Fast Lane


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My business has multiple employees.

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