Calculating Loan Amount

Paycheck Protection Program

 

You must calculate your maximum first-draw loan amount, which is either $10 million or an amount determined by a payroll-based formula, whichever is less.

 

For Self-Employed w/ No Employees:

Step 1:

Find your 2019 IRS Form 1040 Schedule C line 31 net profit amount:
• if this amount is over $100,000, reduce it to $100,000
• if this amount is zero or less, you are not eligible

Step 2:

Calculate the average monthly net profit amount (divide the amount from Step 1 by 12).

Step 3:

Multiply the average monthly net profit amount from Step 2 by 2.5.

Step 4:

Add the outstanding amount of any Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020 that you seek to refinance. Do not include the amount of any advance under an EIDL COVID-19 loan (because it does not have to be repaid).

 

For Self-Employed w/ Employees:

Step 1:

Compute your 2019 payroll costs by adding the following:

2019 IRS Form 1040 Schedule C line 31 net profit amount:
• if this amount is over $100,000, reduce it to $100,000
• if this amount is less than zero, set this amount at zero

2019 gross wages and tips paid to your employees whose principal place of residence is in the U.S., up to $100,000 per employee, which can be computed using:
• 2019 IRS Form 941 Taxable Medicare wages & tips (line 5c column 1) from each quarter
• Plus any pre-tax employee contributions for health insurance or other fringe benefits excluded from Taxable Medicare wages & tips
• Subtract any amount paid to any individual employee in excess of $100,000, as well as any amounts paid to any employee whose principal place of residence is outside the United States

2019 employer contributions for employee group health, life, disability, vision, and dental insurance (the portion of IRS Form 1040 Schedule C line 14 attributable to those contributions)

2019 employer contributions to employee retirement plans (IRS Form 1040 Schedule C line 19)

2019 employer state and local taxes assessed on employee compensation, primarily state unemployment insurance tax (from state quarterly wage reporting forms)

Step 2:

Calculate the average monthly net profit amount (divide the amount from Step 1 by 12).

Step 3:

Multiply the average monthly net profit amount from Step 2 by 2.5.

Step 4:

Add the outstanding amount of any Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020 that you seek to refinance. Do not include the amount of any advance under an EIDL COVID-19 loan (because it does not have to be repaid).

 

For Partnerships: ( individual partners may not apply for separate PPP loans )

Step 1:

Compute your 2019 payroll costs by adding the following:

2019 Schedule K-1 (IRS Form 1065) Net earnings from self-employment of individual U.S.-based general partners that are subject to self-employment tax, multiplied by 0.9235,5 up to $100,000 per partner. Compute the net earnings from self-employment of individual U.S.-based general partner that are subject to self-employment tax by taking box 14a of IRS Form 1065 Schedule K-1 and subtracting any section 179 expense deduction claimed in box 12; subtracting any unreimbursed partnership expenses claimed; and subtracting any depletion claimed on oil and gas properties.
• if this amount is over $100,000, reduce it to $100,000
• if this amount is less than zero, set this amount at zero

2019 gross wages and tips paid to employees whose principal place of residence is in the U.S. (if any), up to $100,000 per employee, which can be computed using:
• 2019 IRS Form 941 Taxable Medicare wages & tips (line 5c column 1) from each quarter
• Plus any pre-tax employee contributions for health insurance or other fringe benefits excluded from Taxable Medicare wages & tips
• Subtract any amounts paid to any individual employee in excess of $100,000 and any amounts paid to any employee whose principal place of residence is outside the U.S.

2019 employer contributions for employee (but not partner) group health, life, disability, vision, and dental insurance, if any (portion of IRS Form 1065 line 19 attributable to those contributions)

2019 employer contributions to employee (but not partner) retirement plans, if any (IRS Form 1065 line 18)

2019 employer state and local taxes assessed on employee compensation, primarily state unemployment insurance tax (from state quarterly wage reporting forms), if any

Step 2:

Calculate the average monthly net profit amount (divide the amount from Step 1 by 12).

Step 3:

Multiply the average monthly net profit amount from Step 2 by 2.5.

Step 4:

Add the outstanding amount of any Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020 that you seek to refinance. Do not include the amount of any advance under an EIDL COVID-19 loan (because it does not have to be repaid).

 

For S-corps & C-corps: 

Step 1:

Compute your 2019 payroll costs by adding the following:

2019 gross wages and tips paid to your employees whose principal place of residence is in the U.S., up to $100,000 per employee, which can be computed using:
• 2019 IRS Form 941 Taxable Medicare wages & tips (line 5c column 1) from each quarter
• Plus any pre-tax employee contributions for health insurance or other fringe benefits excluded from Taxable Medicare wages & tips
• Subtract any amounts paid to any individual employee in excess of $100,000, and subtract any amounts paid to any employee whose principal place of residence is outside the U.S.

2019 employer group health, life, disability, vision, and dental insurance contributions (portion of IRS Form 1120 line 24 or IRS Form 1120-S line 18 attributable to those contributions)

2019 employer retirement contributions (IRS Form 1120 line 23 or IRS Form 1120-S line 17)

2019 employer state and local taxes assessed on employee compensation, primarily state unemployment insurance tax (from state quarterly wage reporting forms)

Step 2:

Calculate the average monthly net profit amount (divide the amount from Step 1 by 12).

Step 3:

Multiply the average monthly net profit amount from Step 2 by 2.5.

Step 4:

Add the outstanding amount of any Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020 that you seek to refinance. Do not include the amount of any advance under an EIDL COVID-19 loan (because it does not have to be repaid).

 

For Non-Profits: 

Step 1:

Compute your 2019 payroll costs by adding the following:

2019 gross wages and tips paid to your employees whose principal place of residence is in the U.S., up to $100,000 per employee, which can be computed using:
• 2019 IRS Form 941 Taxable Medicare wages & tips (line 5c column 1) from each quarter
• Plus any pre-tax employee contributions for health insurance or other fringe benefits excluded from Taxable Medicare wages & tips
• Subtract any amounts paid to any individual employee in excess of $100,000, and subtract any amounts paid to any employee whose principal place of residence is outside the U.S.

2019 employer group health, life, disability, vision, and dental insurance contributions (portion of IRS Form 990 Part IX line 9 attributable to those contributions)

2019 employer retirement contributions (IRS Form 990 Part IX line 8)

2019 employer state and local taxes assessed on employee compensation, primarily state unemployment insurance tax (from state quarterly wage reporting forms)

Step 2:

Calculate the average monthly net profit amount (divide the amount from Step 1 by 12).

Step 3:

Multiply the average monthly net profit amount from Step 2 by 2.5.

Step 4:

Add the outstanding amount of any Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020 that you seek to refinance. Do not include the amount of any advance under an EIDL COVID-19 loan (because it does not have to be repaid).