In this 7-minute read:
- Do wedding planners, vendors, and venues qualify for the PPP loan?
- First and second draw PPP loan eligibility requirements for wedding professionals
- How to calculate your max PPP loan
- What should wedding professionals spend their PPP loans on to receive full loan forgiveness?
- How can you apply for loan forgiveness?
COVID-19 has caused financial distress across all industries, but those that revolve around big events have been hit especially hard. Nearly all wedding planners, vendors, and venues have had to shut down operations for weeks or months at a time depending on your state’s regulations throughout the pandemic.
Whether your business wasn’t able to operate, had fewer events, or was busier than ever, you may qualify for financial assistance through the Paycheck Protection Program, a government stimulus program for small businesses to receive forgivable loans.
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Do wedding planners, vendors, and venues qualify for the PPP loan?
Depending on your employment status, you may qualify for the PPP loan as a wedding planner, vendor, or venue owner. Any business owner, independent contractor, sole proprietor, or self-employed individual with under 500 employees (for first-draw PPP loans) or under 300 employees (for second-draw loans) meets the first eligibility requirement for the PPP loan. So if you operate in any of these capacities for your wedding business (or another side business), you may be able to receive this loan. You will need documentation to verify that employment status though.
If you are employed by a company in the wedding professionals industry and receive a W2 for your tax filings, then you wouldn’t be eligible to receive the PPP loan for that job. However, if you run or operate any business/jobs in the capacities outlined above, or are an independent contractor/1099 worker that works in the wedding industry, you could still qualify for the loan.
Let’s go over the additional eligibility requirements.
First and second draw PPP loan eligibility requirements for wedding professionals
There are different eligibility requirements depending on whether you’ve already received a PPP loan. First draw loans are for those who are applying for the first time or never received a PPP loan. Second draw loans are for those who have already received and spent their first PPP loan.
First draw loan eligibility requirements:
- Beyond meeting the necessary employment status, your wedding business also must have been in operation as of February 15, 2020
Second draw loan eligibility requirements:
- You previously received a PPP loan
- You have spent your first PPP loan on authorized uses by the time any funds from your second PPP loan are disbursed
- Your business experienced a revenue reduction of 25% or more when comparing any quarter in 2020 to 2019
- (You must also have fewer than 300 employees)
For more details and special circumstances for eligibility, check out our FAQ’s:
How to calculate your max PPP loan
You can only receive up to a certain amount for the PPP loan, based on your income or profits. This may look a little different depending on if you have any employees.
Calculating your max PPP loan if you have no employees and file a Schedule C (form 1040):
- Acquire your 2019 or 2020 IRS Form Schedule C. On this form, you can choose to use your net profit (line 31) or your gross profit (line 7). We recommend using whichever number gets you the largest loan—just make sure this amount doesn’t exceed $100,000, and if it does, just reduce that number to $100,000
- Get your average monthly profit by dividing the number you got in Step 1 by 12
- Multiply your number from Step 2 by 2.5 (or by 3.5 if you are a food services or accommodations business that falls into NAICS code 72… for SECOND DRAW loans only)
- Optional step: Add any outstanding amount of the Economic Injury Disaster Loan made between January 31, 2020 and April 3, 2020. Don’t include any advance from that loan in your calculation because that doesn’t need to be paid pack
If you do have employees or fall under a different type of business, follow the steps provided in this FAQ for calculating your maximum loan amount.
Calculating your maximum PPP loan amount is a must for the application process, but it can also help you plan out how much you can get and how to allocate those funds appropriately before you even receive them.
What should wedding professionals spend their PPP loans on to receive full loan forgiveness?
Once you’ve put in your application and received your loan, you can start spending those funds. We recommend planning where those funds will go beforehand so that you can better track them and utilize them towards authorized uses that will grant you loan forgiveness.
Payroll or income
You must use at least 60% of your PPP loan on payroll costs. If you don’t have any employees, then your payroll costs would be your income or profits. You could even use 100% of these funds to pay your income. However, there are other authorized uses for various business expenses that could really help you out too.
If you do have employees, you’ll need to use part of that 60% to pay them as well, maintaining their regular compensation levels, including any tips, commissions, or other wages that you normally pay.
Mortgage, rent, utilities
Do you pay a mortgage on your office space or the venue that you rent out? Any business-related mortgages, rent, or utilities are eligible expenses for the PPP loan.
Interest payments on debts
If you have any debts related to your business—business loans, credit cards, vehicle payments, etc.—you can use part of your PPP loan to help make the interest payments on those debts.
Operational expenses
Certain operational expenses are also approved costs for the PPP loan. You can use your funds to cover the costs of any business software our cloud-based computing service that helps facilitate your business operations: sales and billing functions, processing payments, invoicing, inventory management, product or service delivery, tracking expenses. Think of the software or applications that you currently subscribe to or use every day to manage your wedding business.
Supplier costs
In the wedding world, you likely have several different suppliers, depending on what aspect of the industry you run. The payments that you make to your supplies (for food, tables and chair, or other decor) can be eligible expenses. You just need to have contracts or purchase orders that were put in place before your covered period began in order to use your PPP loans to help cover them.
COVID-19 protection
Another approved expense for the PPP loan as of 2021 are costs for certain protections against COVID-19. If you have had to purchase PPE, expand your venue or office space, or make other significant changes to help limit the spread of COVID-19, you can use your PPP loan to help cover those expenses.
Damages to property
Another 2021 update to the covered PPP loan costs is property damages. If you have property damage relating to the public disturbances and riots of 2020 that weren’t covered by insurance, then your PPP loan can help with those costs.
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How can you apply for loan forgiveness?
After you’ve spent your PPP loans, you can (and definitely should) apply for loan forgiveness. You must apply for forgiveness with 10 months of the last day of your covered period.
To apply for loan forgiveness, you should first check if your lender has opted-in to the new SBA PPP Direct Forgiveness Portal. If your PPP loan was for $150,000 or less, AND if your lender has opted-in to the use of the platform, you will be able to submit your PPP loan forgiveness application online directly to the SBA, using the electronic equivalent of SBA Form 3508S. For full details, read our post about the new SBA PPP Direct Forgiveness Portal and other recent rule changes.
If the above doesn’t apply to you, contact your PPP lender and complete the correct application form. Unless you meet the requirements for using SBA’s new PPP Direct Forgiveness Portal (see above), all communications for your loan forgiveness will go through your lender, so stay in touch with them.
Be sure to gather the necessary documentation to verify where your PPP funds went. This may include invoices, bank statements, lease agreements, cancelled checks, anything that can verify each expense.
When you’ve finished filling out your application and have all of your documentation together, turn that into your lender and they will process it with the SBA for approval. Your lender will notify you when a decision has been made.
Check this out: How do PPP loans affect taxes for independent contractors? (RULES UPDATES)
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