GoDaddy and Next Street, working together on the OpenWeStand initiative, partnered last week for a webinar for small businesses on applying for Paycheck Protection Program (PPP) loans and other COVID-19 relief funding.
We wanted to share some of the most common questions we received during the session in order to help the broader community with information about this important topic.
Watch the full webinar with GoDaddy and Next Street here:
If you’re a small business owner looking for support for the unique needs of your business, please contact your local Small Business Development Center.
Finding a PPP lender
Where can I find a PPP lender?
The SBA keeps a full list of PPP lenders here.
How and when to apply
Should I apply for PPP, unemployment, or both?
You cannot receive both PPP and unemployment benefits for the same time period, but you can apply or both and decide not to take PPP.
Unemployment benefits differ by state, so it’s worth investigating your state’s benefits and compare that with your estimated PPP benefits. One additional consideration is how long you expect to need the salary relief, as PPP is meant only for eight weeks.
Do I qualify if my company has no employees / I am a sole proprietor (or Single Member LLC)? What documents do I need if I am in this situation?
Yes, sole proprietors, or small businesses where the owner is the only employee, and Single Member LLCs are eligible for the Payment Protection Program (PPP).
While you should check with your lender on its specific requirements, the below table illustrates guidance provided by Kabbage on commonly required documents for sole proprietorships, independent contractors, the self-employed, and single member LLCs.
Full information from Kabbage can be found here.
I applied for the PPP before the monies ran out. Do I need to reapply again or is our original loan application still valid?
In many cases, applications stayed in the SBA approval queue between rounds of funding. However, you should check with your lender to ensure that is the case. Your lender should be able to provide you with an ETRAN number for your PPP application if it was submitted for approval by the SBA.
How should I apply as a 501(c)(3)?
Applying as a 501(c)(3) is similar to a small business application. According to the Nonprofit Finance Fund, non-profit organizations can participate in PPP loans if the organization has 500 or fewer full-time and part-time employees and the organization was in operation on February 15, 2020 and with paid employees and/or paid independent contractors.
Additional information for 501(c)(3)s can be found here.
Eligibility and documentation
Can I apply for PPP if I operate an essential business and have no loss of employees or business?
Any business, non-profit, veteran’s organization, or tribal business that employs 500 employees or fewer that was operating on or before February 15, 2020 is eligible to apply. However, note that your lender will require a good faith certification that current economic uncertainty makes the loan necessary to support your ongoing operations.
I use my personal bank account for my business. How do I apply?
Policies regarding applicants’ personal or business accounts vary by bank, with some requiring a business account to process a PPP application and others not. You should check directly with your bank.
I run a Single Member LLC with 1099 employees and/or contractors. How should I apply?
Payments to 1099 employees do not qualify for coverage under PPP, but 1099 employees themselves are considered businesses by the government and can apply on their own for PPP.
As Single Member LLC, you can still apply for your own salary, as explained above.
How do we prove we have been affected by COVID-19? How do you get a good faith certification?
PPP borrowers will have to provide “good faith certification” that the current economic environment makes the PPP loan necessary to maintain operations. Your lender will provide you with a statement to
certify either via a web form or paper/upload form.
Do 2019 tax returns need to be filed prior to applying, even though 7/15 is the filing deadline?
Sole proprietors will need to demonstrate a net profit to be eligible for PPP, so yes, 2019 tax returns must be provided, including a Schedule C. Other businesses should confirm required documents with their lender. In some cases, you may not need to provide a completed tax return and can instead provide a 2019 P&L, but you will need to submit the documents outlined in response above. However, this varies by lender; confirm required documentation with your lender.
Funding amount and use of funds
How do I calculate my maximum PPP loan? Can payroll expenses be more than 75% of my PPP loan / request and still be forgivable?
You can use the below table to calculate your maximum PPP expense or use an online loan calculator like this one. Your payroll expenses can be up to 100% of your PPP loan, and would qualify for full forgiveness.
I know that I can use up to 25% of my PPP on rent and utilities, but what qualifies as rent and utilities? Does payment for co-working or other shared space count as rent? Do cell phone bills count as utilities?
Co-working spaces: There is no clear guidance on the use of co-working expenses as rent, and the specific response may depend on your specific co-working space agreement and your lender’s requirements. For any lease space, the agreement must be in place by February 15, 2020. If your co-working space agreement is month-to-month, you could also consider pausing co-working operations during this crisis or negotiating a lower rate during this time.
Cell phone bills: The SBA doesn’t provide definitive information on the use of cell phones as a utility, but many experts are suggesting that they might be included in the definition if you had your agreement in place before February 15, 2020. Again, check with your lender for its specific requirements.
We are currently not open. When we do reopen, it will be a slow process, and we will need the funds at that time to make payroll. When approved for PPP can you delay the receipt of the funds in order to delay the 8-week timeframe from starting?
Unfortunately, no. The 8-week period begins on the date the lender makes the first disbursement of the PPP loan to the borrower. The lender must make the first disbursement of the loan no later than 10 calendar days from the date of loan approval.
Is the loan application reference number the same as an E-Tran number? What if your lender cannot tell you if your E-Tran number is registered? If my primary lender does not have an E-Tran number for my application, should I consider another lender before money runs out?
Your loan application reference number is likely your lender’s reference number for your application. That is different than the E-Tran number, which is your application’s tracking number within the SBA’s system. Your lender will have to review and submit your application to the SBA for it to be assigned an E-Tran number.
You can apply for PPP funding through more than one lender. The SBA’s system will accept the first valid application that arrives and reject subsequent ones.
How can I check my EIDL status?
Note that new EIDL applications are not being accepted. If that changes, updated information can be found here.You can check the status of your EIDL application 3 ways:
- Through the SBA Economic Injury Disaster Loan Portal using the email address or username and password with which you registered when completing your online application.
- As an alternative, you can also check your loan status through the Disaster Loan Assistance Portal. This also requires the username and password used when applying for your loan
- You can also find out the status of your EIDL application by phone. You can use this method if you submitted your application online or by mail. Call 1-800-659-2955 (the SBA Disaster Assistance customer service center) about the application process, the status of your loan, or with any other questions you may have.
The information required to check your EIDL status varies based on how you contact the SBA. The easiest way is through the online portal. If you use this method, you will need the username that you selected when filling out your application. You can also use the email address that you used when signing up.
Additionally, you will need to enter your password to access the portal. If you call in, you will not have a username or password, so you’ll need to provide additional information. If you applied online, have your application number ready. You may also need to verify additional information, such as the name of your business, federal tax ID, and/or your legal name.
The information contained in this blog is provided for informational purposes only, and should not be construed as an endorsement or advice from GoDaddy on any subject matter.