In this 3 minute read:
- PPP stimulus forgivable loan program FAQs and facts
- PPP fact sheet
- How independent contractors, self-employed, and sole proprietors can get thousands in stimulus and never pay a penny back
- How long does it take to apply for and receive PPP funding?
- How do I get my PPP loan 100% forgiven?
- How to “stack” your first and second-draw PPP loans
The Paycheck Protection Program, initially founded under the CARES Act of 2020, has helped millions of small businesses, independent contractors, sole proprietors, and self-employed individuals receive billions in federal stimulus to help keep their businesses running and people employed. For 2021, there are relaxed rules, new eligible businesses, a new, simpler PPP loan application, and it’s easier to get your loan 100% forgiven, especially for smaller loans under $50,000.
Let’s go over a few PPP stimulus facts!
PPP stimulus fact sheet
How long does it take to apply for a forgivable PPP loan?
Once you have the documentation needed for PPP application, it takes around 30 minutes to apply. Every small business as well as independent contractors, sole proprietors, and self-employed individuals that earned and reported income before February 15, 2020 should apply for these forgivable loans.
Can I qualify for a forgivable PPP stimulus loan?
It’s easier than you might think to qualify for a PPP loan.
You need:
- SSN or EIN
- 2019 or 2020 tax documents
- Email/Phone/Address
- Driver’s license/photo ID
- Voided check
(Note: this is not an exhaustive list. Your lender may have additional requirements)
You DON’T need:
- Employees
- Collateral
- Credit check
- Business bank account
- LLC or official legal entity
How long does it take to get approved for a PPP loan?
We are seeing approvals happen very quickly, within 1-10 days on average. It’s easier to apply than last year, so get to a lender and see how much you qualify for! Womply can help you through the process.
How long does it take for me to get my PPP stimulus money?
We’re seeing loans funded within 10-20 days after application. By law, SBA lenders must fund your account within 10 calendar days after your loan is approved by the SBA.
Go deeper: PPP 2021: How long does it take to apply, get approved, and get funding?
How long does it take to get my PPP loan 100% forgiven?
If you follow the rules and spend your PPP funding on eligible expenses, including at least 60% on payroll expenses, you can apply for forgiveness the day your selected “covered period” ends, either 8 or 24 weeks after you receive your PPP funds. See our PPP forgiveness FAQs for more info!
If I’m a worker/contractor and earn and report money on a 1099/1040 Schedule C, am I eligible for a PPP loan?
Most likely, yes! Right now there’s a minimum PPP loan amount of $1,000, so if you earned over $4,800 in 2019 or 2020 and you were in business before February 15, 2020, you almost certainly can qualify for a 100% forgivable PPP loan.
Why do you need to have earned at least $4,800? Because when calculating your maximum PPP loan amount, the SBA needs evidence of your average monthly payroll (or earnings if you’re an independent contractor, sole proprietor, or eligible self-employed individual and pay yourself), and multiplies that number by 2.5 to get your maximum loan amount. $4800 (annual net profit) ÷12 (months) X 2.5 = $1000.
IMPORTANT PPP UPDATE: As of March 3, 2021, applicants who report their income with IRS Form 1040 Schedule C (i.e., most independent contractors, sole proprietors, and 1099 workers) will be able to use their GROSS (instead of net) profits to determine their max loan amount. This can make a big impact on the amount you can borrow, depending on how much you make and how you have reported your profits. Read more about the latest 1040 Schedule C/PPP loan rules changes, and see the new rules, and the new PPP application form for Schedule C applicants.
Go deeper: 1040 Schedule C tips for independent contractors, sole proprietors, and self-employed
The kinds of workers that may be able to get forgivable PPP loans in 2021 include (but are not limited to): Amazon drivers, Airbnb/VRBOowners, Upwork/Fiverr freelancers, Grubhub/DoorDash/Uber Eats/Postmates/Instacart delivery drivers, YouTubers/TikTokers, content creators, Uber/Lyft drivers, Etsy store owners, contractors, housekeepers, truckers, farmers, computer/IT freelancers, gardeners, resellers, real estate agents… and the list goes on!
If I got PPP funding in 2020 can I apply again in 2021?
Yes! The new rules allow for “second draw” PPP loans for qualifying businesses, contractors, gig workers, etc. If you have under 300 employees, have spent or will spend all of your PPP funding on approved expenses by the time your second loan is funded, and can demonstrate a 25% reduction in revenue in 2020 compared to 2019, you likely qualify for a second PPP loan.
Read more about second draw PPP loans or see our second draw PPP FAQs for details.
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