In this 3-minute read:
- What kinds of businesses are eligible for Paycheck Protection Program loans?
- What if I have multiple locations?
- What if I’m a sole proprietor, independent contractor, or self-employed? Can I apply?
- What if I own a “mom and pop” shop?
During the COVID-19 pandemic, businesses across the world are experiencing financial strain with most people following recommendations to stay home and adhere to social distancing guidelines.
In order to help strengthen the national economy, the federal government has enacted the CARES Act, which allocates $2 trillion to help businesses and individuals to get through the next couple of months.
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!
The Paycheck Protection Program (PPP) is providing loans for up to $10 million to small businesses under the CARES Act. Eligible businesses can already start applying for these loans (and we recommend you apply NOW if you haven’t already).
Are all small businesses eligible for PPP loans?
Small businesses with fewer than 500 employees whose principal residences are in the United States are eligible for PPP loans. Your business also must have been in operation as of February 15, 2020.
Beyond traditional small local businesses, the following types of businesses and organizations are also included:
- Most non-profits (click to learn which nonprofits are eligible for PPP loans and which aren’t)
- Veterans organizations
- Tribal concerns
- Faith-based organizations (see this article for details)
- Self-employed individuals
- Sole proprietorships
- Independent contractors (for details see our article: can independent contractors get PPP loans?)
In order to verify eligibility, you must provide the required documentation for PPP loans during the loan application and approval process.
Is my business eligible for a PPP loan if I have multiple locations?
If your business has multiple locations and meets all of the requirements for eligibility, you can apply for a PPP loan. Depending on how your business locations are set up, under one tax ID or with multiple tax IDs, you may need to submit more than one application.
If you have one tax ID for all of your locations, you will only submit one application.
If you have multiple tax IDs, you should submit an application for each eligible EIN, regardless of how many locations you operate.
Each different EIN must meet the eligibility requirements outlined above.
What if I own a mom and pop shop? Am I still eligible for a PPP loan?
Mom and pop shops are definitely eligible for PPP loans, so long as your business meets all of the requirements outlined above. Whether you are the sole owner with no employees or you have multiple employees (so long as it’s fewer than 500), you can apply for PPP loans to help get your business through this crisis.
Can “small business concerns” with more than 500 employees get PPP loans?
Businesses that exceed 500 employees may be eligible in certain industries. Small business concerns can be eligible borrowers even if they have more than 500 employees, as long as they satisfy the existing statutory and regulatory definition of a “small business concern” under section 3 of the Small Business Act, 15 U.S.C. 632. A business can qualify if it meets the SBA employee-based or revenue-based size standard corresponding to its primary industry. Go to www.sba.gov/size for the industry size standards.
Additionally, a business can qualify for the Paycheck Protection Program as a small business concern if it met both tests in SBA’s “alternative size standard” as of March 27, 2020: (1) maximum tangible net worth of the business is not more than $15 million; and (2) the average net income after Federal income taxes (excluding any carry-over losses) of the business for the two full fiscal years before the date of the application is not more than $5 million.
Read the treasury department’s PPP FAQs for full details.
What if I’m in a Partnership? How do we apply for a PPP loan?
If you are a partner in a partnership, you may not submit a separate PPP loan application for yourself as a self-employed individual. Instead, the self-employment income of general active partners may be reported as a payroll cost, up to $100,000 annualized, on a PPP loan application filed by or on behalf of the partnership. Please see the treasury department’s PPP supplement for full details.
Helpful PPP loan FAQs and resources
Here are some more helpful articles to help you through your PPP loan application process:
- Who can help me get an SBA / PPP emergency stimulus loan?
- PPP lender document checklist: Everything you need to get approved
- How to get an emergency SBA loan from the Paycheck Protection Program
- Do I have to pay back my PPP loan? Here’s how to get your loan forgiven
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!