[U.S. specific] PPP: free money for self-employed & orgs (time-sensitive)

post by steve2152 · 2021-01-09T19:39:14.250Z · EA · GW · 1 comments

PPP is the "paycheck protection program", a big US government giveaway to businesses including self-employed people (e.g. many grant recipients) and nonprofits. There was a PPP round last year—see this EA Forum post [EA · GW]. There's another round of PPP starting imminently, like maybe this week. As a self-employed person, you can get a check for the equivalent of 2.5 months of net income—this is serious stuff, well worth the time to look into. If you looked into it last year and chose not to apply, consider looking again—there's a lot more information now than there was last year, including clarification on who is eligible and how it works.

For my part, I have a family member who is planning to apply for the first time. She skipped the last round because she was better off claiming unemployment at the time. Therefore the info below assumes that you did not already get a PPP check last year, since that's the case I looked into. But if you did already get a PPP check last year, you may still be eligible to re-apply and get even more free money this round. Please comment if you know more details about that.

I'm not an expert, this is just from a bit of online research. Here are some highlights that I found surprising or important:

Please correct any errors, I'm not an expert. In fact, I'm deliberately putting all these claims up without any sources, so that y'all are forced to independently check for yourselves. :-)

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comment by Jeremy (captainjc) · 2021-01-10T16:24:20.244Z · EA(p) · GW(p)

I did a bit of research here. As with above, you should confirm this on your own, but it looks like, to qualify for a second PPP loan, you must show a 25% reduction in  revenue from 2019 to 2020, for either any quarter, or the entire year. 

I was having trouble figuring out whether to count the quarterly difference based on hours worked/invoiced or check/deposit dates. It looks like it depends on the method of accounting you use. Most sole proprietors probably use the Cash method (check which box you checked on your schedule C) and that would mean you use check/deposit dates. More guidance may be released to specify which method of accounting you can use, or if you can choose whichever one you prefer. 

I also read that, if you didn't get a loan in the first round, you should be able get one now without showing the reduction in revenue.