Paycheck Protection Program Calculator

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We are financial professionals, small business consultants, business owners, and technologists from Coast who have applied for these loans either for ourselves, or on behalf of clients, friends, and family. We want to share what we have learned to help you understand what funds may be available for you, how to apply for those funds, what documents you will need, and hopefully help you avoid pitfalls along the way. We are not being compensated in any way for this, we are simply providing information as an act of support for all of the small business owners out there.

We will do our very best to keep the information up to date but please remember that instructions are being clarified and refined on a daily basis. The top of the page will show when the page was last updated.

Answer:

There are different loans available, administered by different organizations and with different terms for repayment and/or forgiveness. The first federal loan to be rolled out was the Economic Injury Disaster Loan (EIDL). This loan is applied for, and administered, directly by the Small Business Administration (SBA). The EIDL offers funding up to $2 million with interest rates of 3.75% for small businesses and 2.75% for non-profits, and has the most flexibility in terms of what the money can be used for. It can be used to pay fixed debts, payroll, accounts payable, and other bills that you are unable to pay as a direct result of COVID-19. As of now, the initial application for this loan requires less documentation than the PPP loan we discuss below.

If you are successful in getting this loan, you can apply for an advance of up to $10,000 which is supposed to be received within three days, however, we have yet to see anyone apply for this loan and receive funds that quickly. Additionally, this advance amount may be forgiven if you spend it on maintaining payroll (including health insurance, paid leave and other approved payroll costs), increased costs due to disruptions in your supply chain, mortgage or lease payments, or prepaying some debt obligations. 

Repayment of the EIDL can be deferred for a full year from the date the loan is issued. Additionally, the SBA offers long-term repayment options to keep payments affordable, up to a maximum of 30 years. Finally, the CARES Act provides for the possibility of refinancing up to $10,000 of the EIDL loan by folding it into the PPP loan described below. Please see this page to learn more. 

The loan that everyone is talking about is the Payroll Protection Program (PPP) loan, because it can be forgiven, provided you spend the funds on a very narrow set of costs. Unlike the EIDL, this loan is underwritten directly by individual financial institutions, meaning there is no central location to apply for the PPP, nor is there a single application, as most financial institutions have drafted their own application document. Because the banks are loaning their own money, which will be reimbursed by the federal government at a later date, they have been very slow in rolling out applications as they waited for clarifications and assurances from the feds that they would actually be repaid. Some smaller banks are not participating at all. Others would like to but have to be approved as lenders before they can start offering loans. 

Finally, there are city and state loans and grants available, too numerous to mention here. We encourage you to review your local city and county websites for additional funding sources and their specific qualifications.

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This is a grey area in our understanding of the requirements and should be confirmed with a lender or tax professional. That said It is our understanding that as long as employees are rehired at a minimum of 75% of their pre layoff wages, the PPP funds can be used to pay their wages during the 8 week period after you receive your loan.

Answer:

The Paycheck Protection Program (PPP) was built to help you retain your employees by offering a loan of up to $10 million dollars to cover your payroll and other, very specific expenses over an 8 week period between February 15, 2020 and June 30, 2020. The loans are 100% federally guaranteed meaning they require no personal guarantee from the borrower. 

The loan is intended primarily for your payroll and payroll related costs like health insurance and retirement benefit obligations and 75% of whatever you receive must be spent on payroll to qualify for forgiveness of the loan. You can receive additional funds to use for other expenses like rent, commercial mortgages, and utilities but you can only use 25% of the total loan for these costs in order to qualify for loan forgiveness. This does not mean the entire loan will not be forgiven, just that whatever you spend on rent, commercial mortgages and utilities in excess of 25% will be converted into a low interest loan that you will have to pay back.

Answer:

The PPP loan is for small businesses and nonprofits that were in operation on February 15, 2020, have been directly affected by COVID-19, and fit the following criteria:

• Your business has less than 500 employees in the United States. There are exceptions to this rule, so please check to see if you are still eligible for PPP if you have more than 1500 employees
• Your 501(c)(3) has less than 500 employees who principally reside in the United States
• Your 501(c)(19) Veterans Organization meets the SBA size requirement. 
• Your Tribal Business meets the SBA size requirements
• You are a small business with a maximum net worth of up to $15 million and the average net income for 2 full fiscal years prior to application that does not exceed $5 million. 
• You are a sole proprietorship, independent contractor, or are self-employed
• Note: if you are a small business that is invested in or owned by venture capital or private equity, you must obey an affiliation rule. This rule has been changing quite a bit, so please consult your council, accountant, or bank to learn more. 
• Note: If you are operating a franchise or receive financial assistance from an approved Small Business Investment Company, the normal affiliation rules do not apply to you. 

You can find the official documentation of who is eligible for this loan here.

Answer:

Look first to your own financial institution to see if they are offering PPP loans, and whether or not they are offering them to people like you. We know that some banks are only offering PPP loans to existing clients with business accounts, or to clients who have both a business account and an open Line of Credit. If your own bank is not offering PPP loans, or will not help you, the SBA has created the following tool to help people find eligible lenders. In addition to this, there are some online lenders who are now approved to issue PPP loans, and even payroll providers and online accounting and bookkeeping software companies have begun offering PPP loans. We are not endorsing or recommending specific lenders. However, check with companies that you have existing relationships with to see if they are participating in the PPP program or have partnered with a lender who is. They seem to be putting this information front and center on their websites so it shouldn’t be too difficult to find.

Answer:

You will need to find an approved lender in order to apply for PPP (you can find federally approved lenders here) and you will need to provide them with specific figures for payroll and other approved expenses that we list below, and be prepared to upload .pdf’s of specific documents as proof of your calculations. The banks are providing online portals where you enter your data, but they are not assisting people in determining what you are eligible for or how to gather the information you need to determine this. With such rapid changes, we recommend that everyone confirm their own calculations against the bank’s calculations to ensure you are applying for all of the funds you are eligible for.

Answer:

Documentation will vary depending on your lender but here is a list of what most lenders we have observed are asking for. We recommend you have them downloaded as .pdf’s, renamed, and ready to upload to the online portal as soon as you have found a lender and are filling out your application. 

• Business information – legal name, address, FEIN, NAICS code
• Company information if not a sole proprietorship – percent ownership, name, contact information, articles of incorporation
• Personal information if you are a sole proprietor – 2019 personal income tax returns including Schedule C and 2019 1099s you received if you are an independent contractor
• Payroll statements that show salaries and other eligible payroll costs like employer portion retirement contributions, sick pay and vacation pay (more on this below)
• Health Insurance costs if not listed on payroll statements (more on this below)
• IRS forms 940 and/or 941’s – a 941 is the quarterly wage and tax form reported by your payroll provider to the federal government, a 940 is the annual filing of the same information. Some lenders are asking for only the 940, others for the 940 plus the four quarterly 941’s. 
• IRS form 944 – Equivalent to a 940 but for those whose federal withholdings are less than $1,000. Everyone with payroll has 941’s but you will either have a 940 or a 944, but not both.
• IRS form W3 – this is the annual summary statement of all of the W-2s that were issued to your employees and the total amount paid in payroll and taxes in a calendar year.
• State tax filings – Some institutions are asking for State employee tax filings as well as federal forms. For example, in California these would be CA EDD forms DE-9 and DE-9c These are issued on a quarterly basis like your 941s but there is no annual filing. You should have four of these per calendar year.

The easiest way to gather these documents is to download them directly from your payroll provider, name them in a way that distinguishes them from each other and save them to a dedicated file on your desktop along with all of the other docs you are gathering during this process. However, not everyone has access to online payroll documents. You may have a payroll service that emails your records to you. You may even be getting paper copies in the mail. If you still have paper payroll records, you will need to scan and save these documents somewhere you can access them when you are filling out your online application. If you do not have access to a scanner you can download a free scanner app to your phone that will convert the pictures you take of your documents into .pdf files that you can then rename and save.

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The PPP loan is a 1% interest rate loan that matures in 2 years*. There will be no prepayment penalty, meaning you will be able to repay the loan at any time before the maturity date. There is no collateral or personal guarantee required. All loans will be processed by third-party lenders under delegated authority of the SBA, and the lenders are permitted to rely on the certifications of the borrowers in order to determine eligibility of the borrower and the use of loan proceeds.

The PPP loans are 100% guaranteed by the SBA with no personal guarantees of payment to the SBA. Lenders are not allowed to collect fees from you or be paid out of the PPP loan proceeds. 

*Note: The interest rate was originally announced as .50% however, as of April 2, 2020, both the Treasury and the SBA updated the loan terms to an interest rate of to 1.00%.

Answer:

We have created a separate calculator and page to help you understand how much of your loan will be forgiven. It is important to note that the SBA has not yet given direct guidance on how to apply the policies behind loan forgiveness. They are suppose to do so at or before April 26, 2020. 

If you are interested in the part of the CARES act that talks about this, go here!

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After you have received the loan, you must apply for loan forgiveness directly through your lender. The lender will make the determination on loan forgiveness based on whether or not the money you received was used in accordance with the loan requirements.

You will likely need to file documentation that proves that the use of the funds match what they were intended for, but since we are months away from being able to request loan forgiveness, we don’t actually know what the requirements will be. Based on what is being asked on the front end to get the loan, we can assume some combination of the following: 

• Payroll tax filings reported to the IRS and state income, payroll, and unemployment insurance filings to verify the number of full-time equivalent employees on payroll during the 8 week period when the funds were spent
• Canceled checks, payment receipts, transcripts of accounts, or other documents verifying payments on covered mortgage obligations, lease obligations, and utility payments during the 8 week period when the funds were spent
• Certification from a representative of the lender (a bookkeeper, accountant, etc) that all funds spent were in compliance with the loan terms.

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No. While the rules did change, you are not required to re-submit your application. For example, it was initially understood that independent contractors (1099 recipients) could be included in the gross payroll and that contractors could be paid out of PPP funds. Now, contractors and 1099 recipients are required to file their own PPP application. Theoretically, this means that if you included 1099 workers as part of gross wages in your PPP loan application, but you are not allowed to pay them out of these funds, then you may have overstated your wages. The worst case scenario might be that whatever portion you received for those contract workers, may not be forgivable, and may instead be converted to a low interest loan. Please note that this is a grey area, and we are only guessing as to what the ramifications of these changes might be. Additionally, the employer portion of FICA taxes (Medicare + Social Security) were not considered part of total payroll costs initially but were later added in, making borrowers eligible for higher PPP loan amounts. At this time we are unaware of any mechanism by which you can amend your eligibility once you have submitted your application but will update this page if that changes.

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Gross Payroll refers to the total amount that your employee receives from you. This includes their wages, bonuses, and tips. Total Payroll refers to the amount that it costs an employer to have an employee. This would include health benefits, retirement benefits, and employer portion payroll taxes, anything you pay above and beyond wages, bonuses, and tips. For the PPP, payroll processing fees and Workers Comp are excluded from Total Payroll. Here is a list of things you should use to determine your Total Payroll: 

• Employee salary, wages, commissions, tips, and bonuses, including severance pay up to $100,000 per employee per year. 
• Employer paid state and local taxes. 
• Employer paid Group Health Benefits contributions.
• Employer paid Retirement contributions.
• Employer paid Federal taxes, which includes:
  • FIT (Federal Income Tax)
  • FICA (Social Security and Medicare) (as of 4.08.20
• Any paid leave paid out during the time period (no FFCRA paid leave).

Some lenders are asking for the numbers to be separated, some are asking for figures to be combined. Some are asking for annual figures and then that number is divided by 12 to determine monthly amounts. Some are asking for monthly figures. Some are asking for payroll figures for total salaries, including amounts over $100k, and then having you back out anything in excess of $100k in another step. Others just want the amounts to only include $100k or lower. The important thing is to have ALL of your data so that whatever your specific lender asks for, you can provide the correct figures. 

Here is the text of the CARES Act that covers this specific issue

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• Workers’ Compensation fees
• 1099 or contractors payroll (If you are not a sole proprietor OR 1099 based contractor)
• Payroll Reimbursements 
• Owner’s draw compensation (we are not sure what the rule is for sole proprietors, please let us know if you have more information on this.) 

Here is the corresponding part of the law that was written by congress that was turned into policy. 

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We know that most of you who have applied for EIDL are still waiting for approval for this loan. 

[UPDATE April 11, 2020: Checks from the IRS for  EIDL have started to show up!]

If you received an EIDL from January 31, 2020 through April 3, 2020 not used for payroll costs, the EIDL does not affect your PPP eligibility. If you received an EIDL from January 31, 2020 through April 3, 2020 used for payroll costs, the PPP loan will be used to refinance the EIDL. If you took an advance up to $10,000 on the EIDL, that amount will be deducted from the forgiveness amount of the PPP loan.

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We are currently updating this FAQ. Please check back later for updates.

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On April 10, 2020 the PPP loan program was opened to the self-employed and independent contractors however, as of 4.12.20 we have received no guidance from lenders that we have spoken to and have no knowledge of any independent contractors or sole proprietors who have successfully completed PPP applications with any financial institution. We will continuously update this section as new information comes in.

• Self-employed or salaried individuals who report income on their Schedule C will use the section termed “net profit” as their gross payroll. It does not appear that the self employed are able to include individual health insurance premiums, the way that employers can include the cost of employee health insurance, however, check with your lender as this appears to be another grey area.
• For independent contractors you will use a combination of your Schedule C and 1099-MISC to determine your salary. As above, you will need to use “net” salary (income-expenses) in order to get your gross payroll.  It also does not appear that Independent Contractors can include your individual health insurance premiums, but please check with your lender as this is a grey area.

Once the total payroll amount has been determined, you will be able to enter this amount into the payroll calculator above to get an approximate maximum loan amount.

Answer:

As a reminder, regardless of which time frame you use, you must have been doing business as of February 15, 2020 in order to apply.

There are three separate time frames that are possible within the PPP loan program and you must select the one that most accurately describes your business.

• You were operational in 2019 and you are not a seasonal business. In that case you have two options. You can use the 2019 calendar year to calculate your total payroll. Or, you  can also choose to use the past 12 months prior to the date of application. 
• You were operational in 2019 and are seasonal. In this case you can choose to pick the time where your payroll costs are highest – from February 15, 2019 to June 30, 2019 or from March 01, 2019 to June 30, 2019. As a reminder, seasonal businesses that were in business for at least 8 weeks during this period, cannot use the “New Business” category.
• You are a newly formed business, formed January 1, 2020 through Feb 15, 2020, provided you have payroll beginning and including Feb 15th or earlier. In this case, you will use payroll from Jan 01, 2020 – February 29, 2020. 

Answer:

When applying for the PPP loan, you are allowed to choose which date range is best/most accurate for your business – either the calendar year of 2019, or the 12 months prior to your PPP application date. In each case, you will need to have the following seven amounts for whichever date range you have chosen, in order to calculate your eligible loan amount:

• Gross Payroll (only including up to 100K per year for employees with annual salaries over $100K) 
• Employer-paid FICA (Medicare and Social Security)
• Employer paid State and Local Taxes
• Employer paid Healthcare Benefit Costs
• Employer paid Retirement Benefit Costs
• Outstanding EIDL Amount (Made between Jan 31, 2020 and April 3, 2020) — this is only for people who took out this loan. May not apply to you.
• Amount of EIDL COVID-19 Advance — this is only for people who took out this loan. May not apply to you.

You will add these seven amounts together to calculate your Total Payroll costs, and then divide by the appropropriate factor to get your average monthly payroll cost. This is the number that is used in the calculator at the top of this page to determine your eligible loan amount. 

The parameters for what items are to be included when calculating Gross Payroll has changed several times since the announcement of the CARES Act, but  seems to have stabilized as of the week of April 5, 2020. For details on what is included, follow this link. As with everything else on this site, please note that we are updating as often as we get confirmation of new rules but given the changing nature of this program, make sure you check with your lender to ensure that you have the most up to date information.

We have provided three different spreadsheets, depending on the way your documentation is organized. Each will give you your total payroll amount and the average payroll amount, which you can plug into the calculator above to get your total loan eligibility amount. According to feedback we have received from lenders, they found these spreadsheets very helpful, as it shows how you arrived at your totals. You will not be able to make changes directly in these spreadsheets once the calculations are complete, so make sure you create a copy for yourself or download as an Excel file. For the latter, hit “File” on the top left corner, and tap “Download as” and select Microsoft Excel. Make sure you rename it to something consistent with your other loan documentation. Once you leave the page, your data will be lost and you will have to re-enter if you did not save to your own device.

There are two tabs on each spreadsheet so whichever you select, make sure you fill out both the “Detailed Payroll Calculation” and “EIDL Calculation” tabs.

Choose one of the following three spreadsheets depending on how your payroll data is organized. Just click on the link and you will be taken to the spreadsheet:

• Annual Payroll by Employee – use this if your records are per employee per year. 
• Total Monthly Payroll  – use this if your records are for the whole company per month. In this calculator, to account for employees that earn more than 100K, we have separated employee earnings into two different columns. One where you can add all the employees earnings per month that make less than $100,000 per year, and another where you can simply put the number of employees that make more than $100,000 per year. 
• Total Monthly Payroll (if you have a download of Employee data from a provider like Paychex, ADP, or Gusto): Note: Many payroll providers are showing employee earnings as a single column and deducting any earnings in excess of the $100,000 limit in a second column. You can use this spreadsheet to accommodate this kind of report in addition to the other components of total payroll. 

Answer:

When applying for the PPP loan, you are allowed to choose which date range is best/most accurate for your business –  – February 15, 2019 to June 30, 2019 or March 01, 2019 to June 30, 2019. In each case, you will need to have the following seven amounts for whichever date range you have chosen, in order to calculate your eligible loan amount:

• Gross Payroll (only including up to 100K per year for employees with annual salaries over $100K) 
• Employer-paid FICA (Medicare and Social Security)
• Employer paid State and Local Taxes
• Employer paid Healthcare Benefit Costs
• Employer paid Retirement Benefit Costs
• Outstanding EIDL Amount (Made between Jan 31, 2020 and April 3, 2020) — this is only for people who took out this loan. May not apply to you.
• Amount of EIDL COVID-19 Advance — this is only for people who took out this loan. May not apply to you.

You will add these seven amounts together to calculate your Total Payroll costs, and then divide by the appropropriate factor to get your average monthly payroll cost. This is the number that is used in the calculator at the top of this page to determine your eligible loan amount. 

The parameters for what items are to be included when calculating Gross Payroll has changed several times since the announcement of the CARES Act, but  seems to have stabilized as of the week of April 5, 2020. For details on what is included, follow this link. As with everything else on this site, please note that we are updating as often as we get confirmation of new rules but given the changing nature of this program, make sure you check with your lender to ensure that you have the most up to date information.

We have provided three different spreadsheets, depending on the way your documentation is organized. Each will give you your total payroll amount and the average payroll amount, which you can plug into the calculator above to get your total loan eligibility amount. According to feedback we have received from lenders, they found these spreadsheets very helpful, as it shows how you arrived at your totals. You will not be able to make changes directly in these spreadsheets once the calculations are complete, so make sure you create a copy for yourself or download as an Excel file. For the latter, hit “File” on the top left corner, and tap “Download as” and select Microsoft Excel. Make sure you rename it to something consistent with your other loan documentation. Once you leave the page, your data will be lost and you will have to re-enter if you did not save to your own device.

There are two tabs on each spreadsheet so whichever you select, make sure you fill out both the “Detailed Payroll Calculation” and “EIDL Calculation” tabs.

Choose one of the following three spreadsheets depending on how your payroll data is organized. Just click on the link and you will be taken to the spreadsheet:

Date range: February 15, 2020 to June 30, 2020

• Annual Payroll by Employee – use this if your records are per employee per year. 
• Total Monthly Payroll  – use this if your records are for the whole company per month. In this calculator, to account for employees that earn more than 100K, we have separated employee earnings into two different columns. One where you can add all the employees earnings per month that make less than $100,000 per year, and another where you can simply put the number of employees that make more than $100,000 per year.
• Total Monthly Payroll (if you have a download of Employee data from a provider like Paychex, ADP, or Gusto): Many payroll providers are showing employee earnings as a single column and deducting any earnings in excess of the $100,000 limit in a second column. You can use this spreadsheet to accommodate this kind of report in addition to the other components of total payroll.

Date range: March 1, 2020 to June 30, 2020

• Annual Payroll by Employee – use this if your records are per employee per year. 
• Total Monthly Payroll  – use this if your records are for the whole company per month. In this calculator, to account for employees that earn more than 100K, we have separated employee earnings into two different columns. One where you can add all the employees earnings per month that make less than $100,000 per year, and another where you can simply put the number of employees that make more than $100,000 per year.
• Total Monthly Payroll (if you have a download of Employee data from a provider like Paychex, ADP, or Gusto):  Many payroll providers are showing employee earnings as a single column and deducting any earnings in excess of the $100,000 limit in a second column. You can use this spreadsheet to accommodate this kind of report in addition to the other components of total payroll.

Answer:

When applying for the PPP loan, you will need to use your payroll from January 01, 2020 to Feb 29, 2020. You will need to have the following seven amounts for whichever date range you have chosen, in order to calculate your eligible loan amount:

• Gross Payroll (only including up to 100K per year for employees with annual salaries over $100K) 
• Employer-paid FICA (Medicare and Social Security)
• Employer paid State and Local Taxes
• Employer paid Healthcare Benefit Costs
• Employer paid Retirement Benefit Costs
• Outstanding EIDL Amount (Made between Jan 31, 2020 and April 3, 2020) — this is only for people who took out this loan. May not apply to you.
• Amount of EIDL COVID-19 Advance — this is only for people who took out this loan. May not apply to you.

You will add these seven amounts together to calculate your Total Payroll costs, and then divide by the appropropriate factor to get your average monthly payroll cost. This is the number that is used in the calculator at the top of this page to determine your eligible loan amount. 

The parameters for what items are to be included when calculating Gross Payroll has changed several times since the announcement of the CARES Act, but  seems to have stabilized as of the week of April 5, 2020. For details on what is included, follow this link. As with everything else on this site, please note that we are updating as often as we get confirmation of new rules but given the changing nature of this program, make sure you check with your lender to ensure that you have the most up to date information.

We have provided three different spreadsheets, depending on the way your documentation is organized. Each will give you your total payroll amount and the average payroll amount, which you can plug into the calculator above to get your total loan eligibility amount. According to feedback we have received from lenders, they found these spreadsheets very helpful, as it shows how you arrived at your totals. You will not be able to make changes directly in these spreadsheets once the calculations are complete, so make sure you create a copy for yourself or download as an Excel file. For the latter, hit “File” on the top left corner, and tap “Download as” and select Microsoft Excel. Make sure you rename it to something consistent with your other loan documentation. Once you leave the page, your data will be lost and you will have to re-enter if you did not save to your own device.

There are two tabs on each spreadsheet so whichever you select, make sure you fill out both the “Detailed Payroll Calculation” and “EIDL Calculation” tabs.

Choose one of the following three spreadsheets depending on how your payroll data is organized. Just click on the link and you will be taken to the spreadsheet:

• Annual Payroll by Employee – use this if your records are per employee per year.
• Total Monthly Payroll  – use this if your records are for the whole company per month. In this calculator, to account for employees that earn more than 100K, we have separated employee earnings into two different columns. One where you can add all the employees earnings per month that make less than $100,000 per year, and another where you can simply put the number of employees that make more than $100,000 per year.
• Total Monthly Payroll (if you have a download of Employee data from a provider like Paychex, ADP, or Gusto):  Many payroll providers are showing employee earnings as a single column and deducting any earnings in excess of the $100,000 limit in a second column. You can use this spreadsheet to accommodate this kind of report in addition to the other components of total payroll.

Answer:

We found this article from Square to be the most comprehensive explanation  of how to run custom payroll reports from common Payroll providers. The article was not written specifically in response to PPP loans but the instructions will help you run the reports you need.

Answer:

No. The original guidance allowed for this, but it was later clarified  that independent contractors who receive 1099s must apply for PPP on their own.

Answer:

Check back as we are creating simple guides for this!

Answer:

• Are draws/distributions treated the same way for sole proprietorships?
• If you applied for loans prior to April 6th changes, and as a result are now eligible for a higher loan amount, is it possible to amend your original filing?
• If there is an error in your bank’s calculation of your eligibility, is there an appeal process?
• When will banks start to take PPP applications from Independent Contractors and Sole Proprietors?
• How long will it take before I receive my funds?
• What if I am a 1099 contractor but I didn’t receive a form 1099’s?Can individual health insurance premiums for sole proprietors and 1099 contractors be included in PPP calculations?

Please let us know if you have any suggestions or see things that we should update.