Self-Employed Entrepreneurs and the PPP Loan 

By Michelle Loredo

Are you self-employed and looking into applying for the Paycheck Protection Program? Now, it is the time to apply! If you are a first-time applicant or have not received the loan, the application deadline is May 31, 2021. 

We have put together all you need to know about applying to the PPP loan program as a self-employed small business owner. 

PPP For Self-Employed Small Business Owners 

The PPP is available for different types of business owners. This includes self-employed individuals, sole proprietors, gig workers and independent contractors. 

Self-employed entrepreneurs can apply to the PPP loan with their 2019 or 2020 net income that proves that their business was active and reported on a Schedule C. They also had to been operational on February 15, 2020, have self-employed income and operate from the United States. 

Self-Employed Small Business Owners with No Employees

If you are a self-employed individual with no employees, you need to file your tax documents that are either from 2019 or 2020. Here are some items you need to apply:

• IRS Form 1040, Schedule C

• Monthly Net Profit

•  Gross Income 

When applying for the loan, you need to include these forms with your application: 

• Form 1040 Schedule C

• IRS Form 1099-MISC 

• Invoice/Book Records

• Bank Statements 

The listed documents will help you establish the operational date mandated by the Small Business Administration.  

Self-Employed Small Business Owners with Employees

If you are self-employed and have employees, you need to file your tax documents from 2019 or 2020. Here are the forms you need to submit:

• IRS Form 1040 Schedule C

• Gross Income

• Employee Payroll Cost

• IRS Form 941 Taxable Medicare Wages and Tips

The SBA has outlined documents, requirements and applications for you to successfully apply to the PPP loan. 

Other Types of Self-Employed Individuals

If you are self-employed as a Limited Liability Company, S Corporation, or partnership, you will have to file different documents. 

If you are an individual that is self-employed through an LLC, the amount you receive will depend on how you filed your taxes. 

If you are the owner of an S Corporation, you may qualify for the PPP loan. It all depends on how the payroll works in your business. 

For partnerships, you need to have additional forms at hand: 

• Form 1065

• IRS Form 941

• Payroll Processor Records

• IRS Wage and Tax Statements

• Any Other Health/Retirement Contributions

We recommend that you work with a specialist who will help you understand the process and successfully apply to the program before May 31, 2021.   

Do You Need More Help? 

The SBDC Network is here to help you with the PPP process. We have live webinars that dive into the new updates on the PPP Loan Program and updates on the PPP forgiveness process. 

If you would like help one-on-one, you can reach out to our business advisors and receive the help you need.