PPP Loan: Every Self-Employed Person Should Know

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The PPP loan is one of the biggest ways for self-employed individuals who are struggling in their business. Thanks to giving excellent news for all the small business owners in the U.S due to the big economic downturn that has forced nearby 9000 businesses to close, the concerned government has implemented the PPP (Paycheck Protection Program).

According to the U.S. Small Business Administration (SBA), while the deadline to apply for the PPP loan has been extended. If you're a self-employed or small business owner, the PPP loan may be able to help in their business needs. On this page, we're going to share the details of PPP loans and their deadline extension.

How it works

The Paycheck Protection Program, also known as PPP, is the perfect option for all small businesses or self-employed. They all can fill their financial needs of the business-related through PPP. Basically, PPP was put in the place to save businesses from downturns. According to the sources, the original date to apply for a PPP loan was 31st March, but it has been extended to 31st May by President Biden.

This is great for all the small business owners and entrepreneurs who still haven’t taken advantage of the PPP. The loan is provided to small business owners or entrepreneurs a loan to fund what is necessary to stay in their business plan. This includes:

• Cost of the Payroll;
• Benefits;
• Rent;
• Mortgage interest;
• Utilities, and;
• Supplier costs and expenses;

As per sources, the above-shared loans must be paid within 4 to 5 years and come with a 1% rate. In these loans, PPP borrowers can get 2.5 times their average monthly costs of payroll, at a maximum of $10 million. Apart from this, the second-time loan holder can also receive 2.5 times their average monthly payroll costs, but at a maximum of $2 million.

Eligibility for PPP loan

If you're a self-employed individual or small business owner, you can take benefits of the Paycheck Protection Program i.e. PPP. In Addition, you're a sole proprietor without payroll costs, you can take benefits of the Paycheck Protection Program. However, the amount of the PPP loan will calculate on the basis of your gross income, up to a maximum of $100,000.

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Whether you're a self-employed individual or small business owner, there are a few important eligibility criteria everyone should satisfy in order to apply for a PPP loan.

As per the SBA, the important qualifications are as below.

Independent contractors, Sole proprietors, and self-employed persons.

Any small entrepreneurs who meet the standards released by SBA.

Apart from these, All the non-profit organizations, and tribal businesses in which 500 employees.

If you have got a PPP loan, you will eligible for a second Draw PPP loan.

How to search online to apply for a PPP loan

Basically, applying and getting a PPP loan is a relatively straightforward process. After meeting the requisite qualifications, you can apply for a PPP loan easily.

Before applying for a PPP loan, you'll have to find a lender through Lender Match. The lender will connect you to some lenders offering SBA-backed funding. All you have to do is answer few questions about your small business. After two days, you will get an e-mail with the complete information of lenders like contact number, application form link.

During the process, lenders may be interested in certain details, including the business plan, credit history, collateral, amount and use of funds, and industry experience.