PPP: How do I calculate Average Monthly Payroll and Loan Request Amount?

In this 2-minute read:

  • How to determine your average monthly payroll for your PPP loan
  • How to determine your Loan Request Amount for your PPP loan
  • What to do if you have received EIDL or other SBA money in 2020

Pretty much every business under 500 employees in America is scrambling to apply through eligible lenders for a Paycheck Protection Program loan under the recently passed $2 trillion CARES act. 

Understandably, the application process is a little confusing and a lot of business owners are asking “How do I determine my Average Monthly Payroll and/or my Loan Request Amount” when submitting a PPP loan application? Let’s see if we can shed some light on this important issue

Womply has partnered with various trusted lenders to offer you the best possible rates on small business funding. Whether you need a term loan, a line of credit, or another type of small business capital, we can help! Click here to learn more, or sign up for Womply Free!

How do I calculate my Average Monthly Payroll for my Paycheck Protection Program loan application?

Calculating your average monthly payroll for your PPP loan is the fundamental part of the whole process, as this figure is used to determine how much you can borrow.

average monthly payroll box on PPP loan application

  • This is a critical piece of information that requires that you provide payroll documentation, and is used in the calculation that determines your loan request amount. (see below)
  • IMPORTANT: Don’t put $0 for your payroll (even if you have not paid anyone or yourself recently) or you’ll have to re-apply!
  • Read this now to understand what qualifies as payroll costs. Here’s how to calculate your payroll for the PPP application. PLEASE READ IT CAREFULLY.
  • You cannot estimate this figure—you must calculate it accurately.

How do I calculate my Loan Request Amount correctly for a paycheck protection program loan?

Loan Request amount box for PPP loan application

  • If your business HAS NOT received loans or advances under the EIDL program in 2020 then:
    • Multiply your Average Monthly Payroll (the number you determined by following the steps above) by 2.5 and round to the nearest dollar.
    • This formula will work for 99.9% of businesses.
  • If your business HAS received loans or advances under the EIDL program or other SBA funding in 2020, contact your loan provider and they’ll help you determine the accurate number, because it’s somewhat complicated. This only applies if you’ve received money in your bank account under EIDL or other SBA funding in 2020—otherwise apply the formula above.
  • Do not enter $0 — this means you are asking for $0 in loans
  • Do not enter more than $10m — you will be disqualified.
  • If you request less than 2.5x your Average Monthly Payroll that means you want less money than you are eligible for. This is allowable but not recommended. You can only apply for PPP once, and deviating from the common formula may slow down your application.

PLEASE NOTE! If you submit your application with errors you cannot edit your entry and you will have to start again!

If you haven’t yet started your PPP loan application process, we recommend you submit your application immediately.

Womply can help you get the small business funding that’s right for you

Womply has partnered with various trusted lenders to offer you the best possible rates on small business funding. Whether you need a term loan, a line of credit, or another type of small business capital, we can help!

Click here to check out our small business loans resources. Learn more, plus get free reputation monitoring and customer insights when you sign up for Womply Free!

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