Apply for a PPP loan today
Skip the bank. Get your loan fast.
Claim your fair share before the funds run out.
You can borrow up to 2.5x your monthly payroll (3.5x for restaurants), with a $2 million limit.
WE’RE ON A MISSION
PPP Loan Direct is dedicated to helping small businesses like yours access this new round of PPP funds quickly.
We make it easy for you to apply for PPP 2.0 funds, even if you don’t bank with an approved SBA lender.
PPP Loan Direct has joined forces with trusted partners ACAP and The Loan Source. They are the experts in processing PPP applications and managing loan forgiveness. Our shared mission is to improve PPP equity.
PPP 2.0 FAQ
Answers to Your Paycheck Protection Program Questions
What is the process for applying for a PPP loan?
What is the application deadline for PPP 2.0?
March 31, 2021. The Round One PPP loans were disbursed very quickly, though, so it is better to apply early.
Do I have to use the same lender as I did for PPP First Round?
No you do not. You can submit a new application here or with any other qualified lender.
Are there any fees to apply or close a loan?
No, there are no fees whatsoever to the borrower.
How can I be sure that there will be enough funding for all eligible borrowers?
The SBA maintains that will be enough funds for all eligible borrowers. Like round 1 of PPP, loans and dollars will be tracked, and data will periodically be published. The 25% reduction in revenue requirement will significantly decrease those eligible.
Does my first-round loan forgiveness application need to be processed before applying for a PPP Second Draw loan?
We have received no indications that forgiveness applications for Round 1 loans must be submitted prior to applying for a second draw. We do not anticipate this will be a condition for applying for round 2 loans.
Who is PPP Loans Direct?
Like you, we’re small business owners who were frustrated by the way the last round of PPP loans were distributed. In particular, too many small business Black business owners and independent contractors got shut out. We knew there had to be a better way to make this round more equitable. We’re not lenders ourselves but we have partnered with ACAP to help get your PPP loan application submitted and funded.
Am I eligible?
Which businesses are eligible for PPP 2.0?
These businesses are eligible:
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- Sole Proprietors
- Independent contractors
- Self-employed individuals
- Certain non-profits (the new bill has expanded eligible businesses to include certain 501(c)(6) non-profit organizations
- Seasonal employers; the new bill has clarified the definition of these to be businesses that operate no more than seven months within a year or earn no more than a third of gross receipts within a six-month period
- Faith-based organizations that have less than 150 employees
- Housing cooperatives that employ less than 300 people
What businesses are not eligible for PPP 2.0?
The following businesses remain ineligiblefor PPP loans:
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- Lobbying organizations
- Organizations involved in political activities or public policy
- Lenders or financial services businesses
- Cannabis businesses (or any other businesses that deal with products that are illegal at the federal level)
- Household employers (such as those who employ housekeepers or nannies)
- Businesses that have defaulted on SBA or federal loans
- Any business that is at least 20% owned by someone who is currently incarcerated, on probation, on parole, or subject to an indictment
- Any business that is at least 20% owned by someone who has been convicted of a felony within the last five years
- Entities affiliated with the People’s Republic of China or Hong Kong or that have a member on their board of directors that is a resident of the People’s Republic of China
- Registrants under the Foreign Agents Registration Act
- Entities that have received or will receive a grant under the Shuttered Venue Operator Grant program
- Lobbying organizations
What are the specific eligibility requirements?
- To be PPP eligible, businesses must employ 300 or fewer employees (down from 500 in Round One)
- Borrowers must demonstrate at least a 25% reduction in gross receipts in any quarter of 2020 compared to the same quarter in 2019
- For example, Q3 2020 revenue less than Q3 2019 revenue by 25% or more ⁃
- Borrower may choose the quarters for comparison but must be in the same quarter of 2020 and 2019.
- Certain exceptions may be allowed for newer businesses not in operation for all of 2019
- Be prepared to support with financial statements, tax return information, other financial records, or Borrower attestation
- If you are a repeat borrower, you must have used or you will use the full amount of first PPP loan
If an organization was not eligible but now is, can it apply?
Yes.
What date is required to meet the 300-employee maximum requirement? Do part-time employees count?
This requirement needs to be met at the time of the application. Yes, part-time employees are included in the total employee count.
How much can I borrow?
How much can I borrow under PPP 2.0?
- The maximum loan amount is $2.0 million
- Two methods to determining loan amount:
- 5x average monthly payroll cost during the 12-month period prior to the loan application date
- 5x average monthly payroll cost for 2019
- If you have a NAICS code beginning with 72 (generally hospitality businesses), you can get up to 3.5X payroll.
What counts as a payroll cost?
- Payroll costs include: employee salary, wages and commissions; payment of cash tips; payment of vacation; parental, family, medical or sick leave; allowance for dismissal or separation; payment required for group health benefits (including insurance premiums); or payment of state or local tax assessed on employee compensation; and for sole proprietors or independent contractors, income or compensation not in excess of $100,000 per employee.
- Payroll costs exclude compensation of an individual person in excess of $100,000 (when annualized); compensation to an employee whose principal residence is outside of the U.S.
What documents/proof will I need to provide?
What documents are required?
List of required PPP application documents:
- Completed PPP Application Form
- Average monthly payroll costs (only applies to businesses with employees)
- Show your work. Borrowers must “show their work” on how they calculated the requested loan amount, and retain the supporting documentation used to get to that figure.
- 2019 Proof of Payroll Costs (or Self Income)
- If you have employees (even as a partnership), you must provide one of these documents:
- IRS Form 940 for 2019
- IRS Form 941 for 2019 (Please note this is a quarterly form, so you must include all four quarters unless you were established less than a year ago. If that is the case, then you need to provide a Form 941 for every quarter since you were established
- IRS Form 944 for 2019
- Payroll processor records from a PEO (Professional Employer Organization)
- If you are a partnership without employees, you must provide:
- 2019 Schedule K-1 (IRS Form 1065). [See here for more info.] Check profit noted on line 14a. If you have no employees and line 14a is $0 or less, you do not qualify for a PPP loan.
- If you are self-employed as a sole proprietor or independent contractor without employees, you must provide a 2019 IRS Form 1040 Schedule C, to prove your own income. Check profit noted on line 31. If line 31 shows $0 or less, you do not qualify for a PPP loan.
- Proof of health insurance payments may also be accepted (but are not required) as part of the lender’s document review and loan calculation process. For Sole Proprietors & Independent Contractors, receipts and invoices showing payments can be in your name. All other types of companies should share receipts, invoices, or a PEO report if available in the name of the business (not your own name).
- Proof of Ownership
You must provide each owner’s name and Social Security Number (SSN), Taxpayer Identification Number (TIN), or Employer Identification Number (EIN), plus one of these documents listed below, as applicable to your business type. (If your business has more than one owner over 20%, you must list the percentage of all owners).
- For corporations (with employees) and partnerships:
- 2019 Schedule K-1 (IRS Form 1065). [See here for more info.]
- 2018 Schedule K-1 (IRS Form 1065) may also be acceptable if the primary owner provides a written statement that ownership has not changed since 2018 or detailing how the ownership has changed.
- Articles of incorporation (with SSN) if they show ownership, and must show % of ownership to be acceptable.
- Bylaws or operating agreement if they show ownership, and must show % of ownership to be acceptable.
- For Sole Proprietors and Independent Contractors:
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- 2019 IRS Form 1040 Schedule C that shows business name and owner name, or
- 2018 IRS Form 1040 Schedule C may be acceptable if the primary owner provides a written statement that ownership has not changed since 2018 or detailing how the ownership has changed.
- IRS Form W9 (for Independent Contractors only).
- Unexpired, Government-issued Driver’s License or Passport for All Owners Over 20%
Each owner must be accounted for in the PPP application form. Along with each owner’s TIN, EIN, or SSN, lenders will also require a government-issued ID such as a Passport or a state-issued Driver’s License.
- Email Addresses for All Owners with 20% or More of the Business
- Electronic Funds Transfer Information
So the lender can deposit approved funds into your account, you may be asked to provide a bank statement (either an electronic [pdf] or scanned copy) showing both the name on the account and the account number. Some lenders (not Fundbox) may accept a voided check. If the account number is misidentified, the wrong bank account will be credited.
- For independent contractors and sole proprietors, the bank statement can be in the owner’s name.
- For all other business types, the bank statement must be in the business name.
- Proof of Business Operation and Active Status with Secretary of State
To verify that your business is Active and in Good Standing, you need to provide either a pdf or just a screenshot of the certificate from the Secretary of State website showing your business is both Active and in Good Standing. It must be current for the month you apply for the PPP loan.
Note: this certificate is not required for Independent Contractors and Sole Proprietors. However, to prove you were in operation as a sole proprietor or contractor, you’ll need to provide a 2020 invoice, bank statement, or book of record establishing that you were in operation on or around February 15, 2020.
How do I comply with the terms of loan forgiveness?
How do I get my loan forgiven?
- Details are still being released, but the current Bill provides for a one-page Borrower attestation and minimal supporting documentation to achieve full forgiveness
- Same rules would apply for Round 2 loans
I am borrowing less than $150K. Is loan forgiveness more streamlined?
- For Round 1 Loans, the bill allowed for streamlined and simplified forgiveness for loans of $150,000 or less
- Details are still being released, but the current Bill provides for a one-page Borrower attestation and minimal supporting documentation to achieve full forgiveness
- The same rules would apply for Round 2 loans
What are the requirements for loan forgiveness?
To qualify for loan forgiveness, at least 60% of loan proceeds must be spent on:
- Employee payroll costs
- Group health insurance payments
- Dental and vision plans
- Disability benefits
- Life insurance
- Owner compensation costs
40% of loan proceeds may be spend on:
- Paid time off and leave for employees
- Pension and retirement plans
- Federal income and FICA taxes
- State unemployment insurance
- Utilities
- Rent
- Interest on mortgage payments
- Business software or cloud services that facilitate business operations
- Costs related to property damage, vandalism or looting due to unrest that occurred in 2020
- Supplier costs that are essential to the operations of the business
- PPE that help businesses comply with federal and state COVID-19 safety guidelines (like face masks)
- Measures that help businesses comply with federal and state COVID-19 safety guidelines (like plastic separators)
What are the loan terms if there is no forgiveness?
What is the interest rate of the loan?
PPP loans have an interest rate of 1%.
Can my interest rate go up later, if my loan forgiveness is not approved?
No. Interest rates on PPP loans are non-compounding and non-adjustable. Your rate cannot change.
What is the repayment schedule?
- Loan payments will be deferred for borrowers who apply for loan forgiveness until SBA remits the borrower’s loan forgiveness amount to the lender.
- If a borrower does not apply for loan forgiveness, payments are deferred 10 months after the end of the covered period for the borrower’s loan forgiveness (either 8 weeks or 24 weeks).
Are they any fees?
Neither the government nor lenders will charge small businesses any fees.
Do I have to put up collateral or a personal guarantee?
No collateral or personal guarantees are required.
What are the tax implications of a PPP loan?
Forgiven PPP loans are not taxable and forgiven expenses are tax-deductible
