PPP Loan

As many may be aware, the second coming of the COVID-19 Stimulus Plan was signed into law on December 27, 2020. It provided for $900 Billion of support including extended unemployment benefits, rent relief and eviction protection as well as funds for small to medium sized businesses hit hard by the pandemic.


Self-employed individuals have found the rules around PPP difficult to understand and question whether they qualify, especially since many were either told that during the first draw or were denied as many larger companies received much need working capital.

One thing to know is that the new Stimulus Bill is much more inclusive and is geared more towards the unemployed and Mom and Pop businesses. Here are the qualifications:

  • In Business on or before February 15, 2020
  • Had self-employment income (e.g. independent contractor or sole proprietor)
  • Reside in the United States
  • Filed or will file a Form 1040 Schedule C for 2019 or 2020

What’s important to note is that 1099 employees should not be included in the calculation. The SBA (Small business Association) provides guidance on how to do this. But typically, the qualifying amount is 2.5x Payroll or what’s on Schedule C, Line 31 as the Net Profit. You can view or download the SBA document here.


Use these steps if you have no W-2 employees in your business:

  1. Compute 2019 or 2020 payroll or use Net Income from Schedule C as
    1. 2019/2020 Form 1040 Schedule C line 31 net profit amount
    2. 2019/2020 Form 941 Line 5c gross wages and tips paid
    3. 2019/2020 Form 1040 Schedule C Line 9 employer contributions and and state and local taxes assessed on employee compensation.
  2. Divide “1” above by 12 to get average monthly amount
  3. Multiply “2” above by 2.5 to get your PPP Loan estimate

To note, if you are using 2020 and have not yet filed a 2020 return, fill it out and compute the value annualized up to $100,000 and prorated for the reporting period (if you are filing/using Quarterly 941). The Line 3 amount must be $100,000 or less. If not, reduce it to $100,000 and if less than Zero set to Zero.

You will not qualify for amounts less than Zero. Similar rules and steps are provided in the SBA document for business with employees. You can find that information here starting on page 2.

We have partnered with Smartbiz Loans who’s funded more than $4 Billion in loans since 2013 to make the PPP Loan process quick and efficient. You can prequalify in 5 minutes and complete the entire process in less than an hour if you have documentation (CARES Act Payroll Reports, IRS Form 941, IRS Form 1040 Schedules C or E and Personal documentation).

Or Contact Rock Capital Associates at (877) 640-1590 to start your application.