PPP Loan Calculator: How Much Can My Business Get?
While these tools will help most business owners determine how to calculate their PPP loan amount, you may have more specific questions. Your accountant or bookkeeper will be the best resource for one-on-one support as you calculate your PPP loan amount. As your lender, Pursuit is not able to provide you with advice specific to your unique business situation. One of the most common questions business owners ask about the Paycheck Protection Program (PPP) rules and regulations is ‘how do I calculate my PPP loan amount?
You will have five years from the date your loan was deposited to repay any amount not forgiven. All loan payments are deferred until your loan forgiveness decision date (or until about 16 months after receiving your loan if you don’t apply for forgiveness). If this is your second PPP loan, and your business is not a restaurant Understanding the Cost of Bookkeeping for Small Businesses or hotel, get up to 2.5x or 250% of your 2019 or 2020 average monthly payroll expenses (or average monthly net profit for non-employers). If your business is a restaurant or hotel, get up to 3.5x or 350% of your 2019 or 2020 average monthly payroll expenses (or average monthly net profit for non-employers).
Calculating your loan amount as a C corp
To be forgivable, at least 60% of the loan proceeds must be spent on payroll, which includes benefits. The original PPP rules required at least 75% of the PPP loan money be spent on payroll. This was changed to 60% under the PPPFA to give businesses more flexibility on how to use the money. For First Draw PPP loans, meaning those applicants who are taking a PPP loan for the first time, the maximum loan amount is 2.5 times the average monthly payroll for 2019 up to $10 million. The business is taxed on its profit as an entity, and the owners are then taxed based on their dividends, which reflect their share of those profits.
- If you don’t employ anyone (your business didn’t file a W-2 for any employee including yourself), we may ask you to provide a utility bill, lease, bank account statement, or payroll processor statement with your business name from February 2020.
- Also exclude compensation of an employee whose principal residence is outside of the US.
- Yearly business net profit as reported on your Form 1040 Schedule C, up to $100,000, can be counted as payroll for self-employed individuals.
- If you are taxed as an LLC, your salary is directly linked to your business’ profit, and is the amount you paid self-employment tax on in 2019 or 2020.
- Large banks were inundated with PPP loan applications during the first round, and many didn’t have the time or bandwidth to respond to everyone who applied.
Also exclude compensation of an employee whose principal residence is outside of the US. A granular analysis of the data by NBC News revealed that more than 25 loans, valued at roughly $4 million, went to businesses at properties owned and rented out by the Trump Organization and the family of President Trump’s son-in-law and top advisor, Jared Kushner. Round three allowed a business to choose any length period between eight weeks and 24 weeks, giving it more control over how to handle any needed reductions in a workforce, once PPP funds were depleted.
What Was the Total Amount of Funding for the Paycheck Protection Program Loans?
The Small Business Administration recently answered key questions and provided clarity around maximum loan amounts. PPP loan recipients could use up to 40% of loan proceeds for non-payroll costs, although the list of authorized uses did limit non-payroll spending. Round three PPP loans were not included in a company’s taxable income. If a loan was forgiven, expenses paid with the proceeds of the loan were tax-deductible.
Although this new guidance is an excellent opportunity for the self-employed who need financial help, the rules are complex. We recommend consulting with your accounting professional and https://adprun.net/intuit-bookkeeping-expert-careers-remote/ discussing PPP, ERTC, and any other SBA-related guidance. Every business that applies for a PPP loan needs to have been in operation since at least February 15, 2020 to be eligible.