What is PPP and What Changed?
Back in 2020, the US government created the Paycheck Protection Program which was designed to help businesses pay employees through the COVID crisis.
The way the rules were written made sense if you had a larger company and had sizable payroll expenses already set up. These rules did not work well if you were a sole proprietor (one man shop) who filed his business on his personal tax return. That's because for those filers the government was looking to the net profit after expenses and worked on replacing 2.5 months of that amount.
Of course, that's actually not so helpful. It's not as if the expenses disappeared.
Fortunately, about 2 weeks ago, the rules were changed. Now sole-prop business filers (Schedule C) could use the revenue for the basis of the loan instead of the profit.
Huge difference!
Who Can Get PPP Money Now?
With the new rules, anybody who files a Schedule C for 2020 is qualified to get 2.5 months of revenue as a PPP loan. The loan will be forgiven after using at least 60% of it on approved purposes (read as: pay self-employment taxes).
How Can I Get PPP Money?
It's a surprisingly simple process.
Step 1: Go to https://start.blueppp.com/
Step 2: Go through the quiz
Obviously if you already got a PPP loan, you would answer yes.
If you filed a Schedule C in 2019, put the revenue (Line 7) number here. Otherwise, just put $1,000 or $2,000. It doesn't actually matter. The 2019 info is just there in case it is higher than 2020's number.
Here you put your 2020 revenue number. It's OK if you haven't filed your 2020 taxes yet. You can use draft numbers for revenue.
Fill out name, and then fill out email.
That's it for the qualification quiz. Assuming you answered in a way that showed you are qualified, it will take you to the full application.
Step 3: Fill out the application
The formal application will ask you to either upload your Schedule C or prepare a draft version. If you have already filed your 2019 and 2020 tax returns, look at the Schedule C line 7 for both of them. Whichever is higher will be the basis for the 2.5 revenue months on the loan.
If you have not filed your 2020 taxes yet, use the draft form option and input your 2020 revenue and expenses. With the rule changes, the expenses don't actually matter any more, but they are needed for completeness.
Then you'll check off some questions that say things like you are not the President of the US, you do actually need the money (who doesn't?), are not in prison, etc etc.
Next you do a connection to your bank account where you want the money deposited. This bank account needs to have already been in existence in February of 2020.
The trickiest part is actually uploading a copy of your drivers license. If you are doing it on desktop, it's handy to have pictures of that ready to go. Otherwise, the application can text you a link to finish up on your phone using your phone camera.
Once you submit all that, you're done.
Total time for quiz and application should be less than 10 minutes if you have your numbers ready.
Step 4: Follow Up
You don't have to do anything here. The processor will send you text messages. A lot of them. They will keep you up to date with where you are in the process.
Step 5: Get PPP Money
Once you're approved and you e-sign the final docs, you're done. Use that PPP money!