Have you ever known what actually PPP stands for? If you are just new to everything about loan, knowing PPP is a must. PPP stands for Paycheck Protection Program. PPL loans means the forgivable loans provided for small businesses using self-payment income. If this is the first time for you to search for the step-by-step guide on how to apply for PPP loan, you come to the right page then.
In general, we are going to show you the way of applying for PPP loans using the application form. In this case, there are two types of application form you can use to apply for PPP loans. Those are the application form 2483 and application 2483-C.
Contents
Application Form 2483
If you are using application form 2483, you should follow some parts of rules that come with each step in it. Pay attention to each of the rules and don’t miss even one.
Part 1: Complete Your Business Information
The primary steps to apply for PPP loans using app form 2483 is to complete your business information. Usually, you will be required to select your business structure that represents your business. In filling this information, you should be specific. For example, choosing “Sole Proprietor” is better than “Self-employed Individual”. Though these both of term are right, but one is convening more information than the other.
Later, fill in your information about your business name and address. In details, provide your Business Legal Name as well as your Tradename. You can find your business name usually on the government form while the Tradename is on your bank statements or invoices. Note, you can also find your Address Name in these documents.
If you are not a contractor, you’ll need to input information about the year you are establishing your business. Please be consistent with the documents to ensure the way you make a business official. Input also your NAICS code that you can find on a website like NAICS.com. These codes are self-assigned that means you can pick the code that fits your business well. Later, you need also to enter your Business EIN/TIN/SSN. EIN stands for Employer Identification Number. TIN stands for Taxpayer Identification Number. And SSN is Social Security Number.
To complete your business information, don’t forget to enter the contact information for your future communications.
Part 2: Loan Amount Calculation
The next part on how to apply for PPP loan using application form 2483 is to loan amount calculation. This way, you can start with finding your average monthly payroll costs that you can calculate by following the rule below:
- Add up payroll costs for all employees whose principle place of residence is the U.S. the payroll costs include the salaries, wages, tips and commissions as well as the employee benefits such as allowance for dismissal, insurance premium and retirement benefits. State and local taxes are also the employees benefits you can expect to gain.
- Subtract any compensation paid to an employee in addition to $100,000.
- Divide the total amount from the results of subtraction by 12 months and place it in the Average Monthly Payroll box.
Part 3: Applicant Ownership
Applicant ownership comes with the list of all members of the ownership that holds up to 20% or even more of the business. If there are more owners than the spaces on the appl. Attach them as a separate sheet.
Part 4: Applicant Demographic Information (optional)
Besides being optional, this part is fully voluntary and usable for reporting only. Thus, any information that you make them ready here will not give an impact to your loan application.
Part 5: Questionnaire
The questionnaires contains questions and initial that you can indicate well. Just answer “yes” to questions 1,2,5,6 than means ineligible for PPP loan.
Part 6; Certifying That You Applied In A Good Faith
There are 10 statements on page 3 of application form 2483. It is a must to sign each of those statement in order to certify that you are applying in good faith. Putting a sign on any of those statements later will find it untrue. This can lead you to the penalties through the fines.
Application Form 2483-C
Now that you have already known on how to apply for PPP loan, it is the best time to learn how to fill the application. Application form 2483-C is also called Schedule C that can be done from box by box. This way, it is highly recommended that you follow the rules by downloading a PPP loan application form.
So check in with your lender before you fill the application in the form. This way, you will required to submit your information on online portal instead of submitting a paper application.
Similar to application form 2483, the application form 2483-C or schedule C consists of some sections as follows:
Part 1: Complete Your Business Information
Like you do with application form 2483, this one also requires you to complete your business information that include business structure, business name and address, year of business establishment, NAICS code, Business EIN/TIN/SSN, Contact information, Gross income total amount, tax year used for gross income and number of employees.
The business structure must be filled in the box to explain your business. For example, if you carry out a contract work or work for a business like Uber, select “independent contractor”. If you are not sure, you can choose “Self-employed Individual.”
Input both of your Business Legal Name and your DBA or Tradename if they are applicable. You can find your business name on any government and your Tradename on invoices or bank statements. Note, you can also find your Business Address in these documents.
Applicant must also input the year of his business establishment. Year establishment is the year when you start operating your businesses.
NAICS code is also a must to fill in your application form. Find the code on a website like NAICS.com. NAICS codes are self-assigned, meaning that you can take out the codes that fit much to your business rather than one that is assigned to you.
Similar to using application form 2483, using application form 2483-C also requires you to enter your business EIN, TIN, or SSN. EIN stands for Employer Identification Number. TIN stands for Taxpayer Identification Number. Meanwhile, SSN stands for Social Security Number. These can be found on the tax returns. However, if there is any problem finishing this step, you may follow the IRS’s steps.
Don’t forget to enter your contact information, too. In this part, you can provide your name, business phone and email address of your primary contact for the application. This contact information will be the ones where the communications are directed to.
Completing your business information also involve the step to input your total amount of Gross Income that you can take from line 7 of your Schedule C. This way, you can use a 2019 or 2020 schedule C for your loan application. If you haven’t completed a 2020 schedule C, you will be required to draft one up for the purpose of application.
Other step on how to apply for PPP loan using application schedule C is inputting the tax year used from gross income. This way, you can select either 2020 or 2019. Later, it is also mentioned that applying for PPP loans should mention the number of employee in the available box. If you don’t, you can also provide your employees headcount including you yourself.
Part 2: Loan Amount Calculation
The second section to apply for PPP loan with Schedule C is to loan amount calculation. This way, there are two sections for the PPP loan amount calculation. Those are one for the business with employees and one for the business without employees.
With employees, you can start calculating the gross income minus any payroll costs as reported on Schedule C 2019 or 2020. You can find this by taking the amount reported and subtracting the amounts in lines 14, 19 and 26. Put these amounts in box A.
Without employees, you can start calculating your gross income from your Schedule C 2019 and 2020. This amount is usually reported on line 7. So put this amount in box A. Meanwhile, in box B, divide this value by 12. If the value is higher than $8,333,33, you must use $8,333,33. Multiply the box B by 2.5 and use the value to fill box C. Finally, you will get your PPP loan amount.
Part 3: Applicant Ownership
All members of ownership list holds up to 20% or more of the business. If there are more owners than the spaces available on the application. Just attach them as a separate sheet.
Part 4: Applicant Demographic Information (Optional)
Optionally, this section is voluntary and usually used for reporting purposes. If you share any information here on this page, your loan application won’t be impacted.
Part 5: Questionnaire
The questionnaires contains questions and initial that you can indicate well. Just answer “yes” to questions 1,2,5,6 than means ineligible for PPP loan.
Part 6; Certifying That You Applied In A Good Faith
There are 10 statements on page 3 of application form 2483. It is a must to sign each of those statement in order to certify that you are applying in good faith. Putting a sign on any of those statements later will find it untrue. This can lead you to the penalties through the fines.
Criteria of PPP First Draw Eligibility
In addition to the step-by-step guide on how to apply for PPP loan, there are criteria of PPP first draw eligible. This means, you are eligible to do so. Here are the criteria:
- Make sure that your business was operated before February 15, 2020.
- You still run your business well.
- You have already no more than 500 employees.
- Limit only 500 employees are available per location.
Which Application You Should Apply
If you want to apply for PPP loan in order that you can apply soon. This way, you can be eligible for either 2483 or 2483-C. The form application 2483 is the main form that most businessmen use while the application form 2483-C is widely used by self-employed individuals who are applying for PPP loan with their net income taken from Schedule C.
If you don’t use Schedule C, read on for more information included in form 2483. However, if you are applying using a schedule, be sure to jump ahead to our overview of form 2483-C.
Final Word
Finally we may conclude that the step-by-step guide on how to apply for PPP loan is available in two ways. This way, you can use application form 283 for schedule and the application form 2483-CES. Follow the rules of each application we have shared and find which one will be suitable for your business.
