The deadline for applying for a Paycheck Protection Program (PPP) loan was extended until August 8th, but not every small business that qualifies has applied yet. We’re here to dispel some misconceptions about PPP qualification and application. There’s still time for you to apply! Opportunity Fund will be accepting applications until Tuesday, August 4th.
“Can I still apply for a PPP loan if I’m a sole proprietor?”
“Can I still apply if I’m a one-woman business and don’t have any employees?”
“What if my business is newer and I haven’t paid myself through a W-2 yet?”
“What if I don’t have a high credit score?”
“What if I haven’t filed my 2019 taxes yet?”
The answer to all these questions is yes, you can still qualify for a PPP loan!
What exactly is the Paycheck Protection Program and what can I use it for?
The PPP is a federal program through the Small Business Administration (SBA) that provides loans “designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses.” For more information about the program, look at the SBA’s official website here.
PPP loans help small businesses, including sole proprietors and independent contractors, and private non-profits maintain payrolls and continue necessary payroll-related payments like rent and utilities. The loan may be used for:
- Payroll costs: compensation in the form of salaries, wages, commissions, cash tip payments. If you don’t have employees, the loan can be used to cover owner’s compensation (net profits)
- Healthcare costs: any costs related to the continuation of group healthcare benefits, including insurance premiums
- Mortgage interest payments (but not payments on the mortgage principal)
- Interest on any other debt obligations incurred before February 15, 2020
How do I know if my business qualifies?
There are a few simple qualifications. You may qualify even if you think you don’t!
- Your business was in operation as of February 15, 2020
- You’re an independent contractor or sole proprietor or your business/organization has employees who reside in the U.S.
- Truck owner/operators and Mobile Food Businesses can qualify
- You don’t need a minimum credit score to qualify. PPP isn’t based on credit score and your lender doesn’t need to check credit as part of the process
Note that Opportunity Fund is not able to offer funding to non-profits and certain industries. Please call us at (844) 677-3863 or email us at PPPhelp@opportunityfund.org with any questions about eligibility.
How much can I get from a PPP loan?
The amount you can get from a PPP loan is calculated based on 2.5 times your business’s (or organization’s) monthly payroll costs. Payroll costs include compensation, as outlined above, along with other payroll-related costs like retirement payments, state and local taxes on payroll, payment for vacation or paid leave, group healthcare costs, and allowances for separation or dismissal. Use our template to calculate your loan size here.
- Your loan amount depends on your legal structure and whether you have employees or are self-employed. To help accurately calculate your annual payroll, please refer to our “Cheat Sheet.”
- Once you calculate your annual payroll figure, use our loan calculator (enter the annual payroll into cell B8/B21/B34) to figure out your max loan amount.
- If you request more than 2.5X your monthly payroll, your application will be delayed.
You mentioned something about loan forgiveness…
The SBA expects a high volume of forgiveness requests. No more than 40% of the forgiven amount can be for non-payroll costs (i.e., mortgage interest, rent, and utilities). If your business has laid off employees, that will also affect how much your loan can be forgiven. The total effect on your PPP loan’s forgiveness-eligibility depends on some complicated math that we can help you calculate. You can also do an estimate on the excel sheet provided here. Please note it is an estimate.
To receive loan forgiveness, a borrower must provide documents verifying payments (on mortgage interest, rent, and utilities) and payroll (number of employees, pay rates, including IRS payroll tax filings and state income, payroll, and unemployment insurance filings). These documents must be certified from a representative of the business that the information is true.
It is likely there will be a simplified forgiveness process for loans under $150,000, but congress has not yet approved this. You can find the most accurate and up-to-date information about loan forgiveness on the SBA’s website.
I’m interested, where do I apply for a PPP loan?
Each business is only allowed one SBA number, so be careful when selecting where to apply for your PPP loan. We have received many calls with stories about business owners running into problems with popular for-profit fintech lenders. Before applying for a PPP loan, we encourage you to do your research on third-party sites and find a trustworthy, transparent lender.
Opportunity Fund is an approved PPP lender. If you’d like to start an application through us, we’d be honored to help support your small business succeed. Please apply by August 4th so we have adequate time to go over your application thoroughly and make sure everything is in order before the hard deadline on August 8th.
Click here to start or modify your application with Opportunity Fund. Please note that the application needs to be filled out on a computer, using a Chrome browser. It is not compatible with mobile phones.
Is the application process easy? What do I need to do to apply for a PPP loan with you?
If you choose to apply for a PPP loan with Opportunity Fund, the application process is very easy and entirely online. A dedicated Opportunity Fund staff member will support you through the application process. Here’s how to get started:
- Access the online application using computer and Chrome Browser here
- Fill out personal information, loan details, owner information and upload documents
- Refer to our general PPP resources page to answer FAQs
- Within 2 business days, our Underwriting team will review the documents and follow up if any information or documents are missing
- Review includes a review of the loan calculator which must match payroll documents (i.e. Tax Returns, Form 941, Form 940, etc). We’ll also make sure that your SBA application signed/dated
- Submit for an SBA number; you will be emailed your SBA number
- Opportunity Fund has up to 10 days to disburse funds (likely faster)
- Funds are disbursed to your bank account
Collect and prepare these documents prior to applying:
- 2019 Tax Returns (We do need 2019 tax return documents as part of the loan package in many cases, the returns don’t need to be filed for us to use them. The return can still be on extension)
- Color front and back of Government issued ID (e.g., driver’s license or passport)
- 2020 Bank Statement (Feb)/Invoice/Book of Record (or similar documentation showing you were in operation and had at least yourself as an employee on 2/15/20)
- Loan calculator
You may need more depending on your business structure. Here is a cheat sheet we created for you with different document requirements for different business structures.
Opportunity Fund, the nation’s leading nonprofit small business lender, believes small dollar loans help hard-working entrepreneurs make lasting change in their own lives and build stronger communities by growing businesses and creating jobs. Opportunity Fund’s community of donors and investors is creating an inclusive financial system that empowers women, immigrant, and minority small business owners. Our strategy combines microloans for small business owners and New Markets Tax Credit investments in high-impact community infrastructure projects. Since 1994, Opportunity Fund has deployed more than $1 billion and helped thousands of entrepreneurs invest in their families’ futures. The organization has committed to lending an additional $1.2 billion to small business owners across the country and investing $174 million in community real estate projects by 2023.
In March, 2020, Opportunity Fund and Accion, The US Network, joined forces to establish Accion Opportunity Fund, the first organization focused on a national microlending strategy to meet the credit needs of small businesses – developing new products, establishing new partnerships, promoting research and financial education, and leveraging digital technologies to support mission-driven lending.