Locate your annual gross profit net profit on your 2019 Form 1040 Schedule C, line 7 or 31. Divide your annual gross profit or net profit by 12 to calculate your average monthly payroll cost. Multiply your average monthly net profit by 2.5.

Can owners pay themselves with PPP loan?

If you are the sole owners and staff of your business, you can still receive PPP loans and use them towards your payroll costs. You are an employee of your business, so you can use your loans to pay yourselves.

How does the SBA paycheck protection program work?

An SBA-backed loan that helps businesses keep their workforce employed during the COVID-19 crisis. The Paycheck Protection Program (PPP) is a loan designed to provide a direct incentive for small businesses to keep their workers on payroll.

What to look for in a SBA loan?

Protect yourself from predatory lenders by looking for warning signs. Loans guaranteed by the SBA range from small to large and can be used for most business purposes, including long-term fixed assets and operating capital. Some loan programs set restrictions on how you can use the funds, so check with an SBA-approved lender when requesting a loan.

Where can I get a SBA 7 loan?

You can apply through any existing SBA 7 (a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program.

How does the SBA work to help small businesses?

The SBA works with lenders to provide loans to small businesses. The agency doesn’t lend money directly to small business owners. Instead, it sets guidelines for loans made by its partnering lenders, community development organizations, and micro-lending institutions. The SBA reduces risk for lenders and makes it easier for them to access capital.