Dummies’ Guide to Filling Out the Paycheck Protection Program Application

[Disclaimer] This article was written to the best of our knowledge with the latest news released from the Federal government. There are many moving parts to both of these programs, and as the days and weeks pass, there may be more clarification to some parts that are vague or confusing. Please be mindful, that I have tried to gather as much information that I can, and may miss some details worth noting.

The Paycheck Protection Program has been the buzz of the week, and it is finally here! After a few days of endless discussion and head pounding attempts to interpret and understand the program, it’s game time. 

I have included screenshots to guide you through the application page as well as notes to make the application process less confusion. Your ultimate guidance will be your SBA 7(a) lender. 

When can I apply?

Starting April 3, 2020 for small businesses and sole proprietorships

Starting April 10, 2020 for independent contractors and self-employed individuals

Note: that some lenders like Chase are delaying their application acceptance until further notice.

Where can I apply?

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. Visit www.sba.gov for a list of SBA lenders.


Here is the latest application from Sterns Banks: FINAL SBA Paycheck-Protection-Program

How do I calculate Payroll expenses?

Add ALL of these costs up:

  1. Gross wages (before taxes) for all employees that get paid $100,000 per year or less (this is your w3/earnings report printout from your payroll program)

  2. Payment for paid vacation, family, medical and sick leave (not to be the same with Family First CoronaVirus Act)

  3. Employee commission and bonuses, allowance for separation or dismissal

  4. Group health care benefits including insurance premiums

  5. Retirement Plan (Pension, 401K, Simple IRA, SEP IRA) *do not include employee's contribution

  6. State and local taxes assessed on compensation (included in gross wages)

    **Can I include my Independent contractor associate into this calculation? (Please ask your lender). ***New resources are saying that IC pay is NOT to be included in the payroll calculation as they can apply for their own. Please verify with your lender. 

If you employ a 1099 IC, please encourage them to apply for the PPP on their own. 

I am a sole proprietor/Independent contractor, how do I calculate payroll?

Payroll is calculated as wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee. See above for further payroll expenses you can include.

For purposes of calculating “Average Monthly Payroll”, most Applicants will use the average monthly payroll for 2019, excluding costs over $100,000 on an annualized basis for each employee.

Check out Jose Caro CPA "Paycheck Protection Program Loan Forgiveness" Calculators

Part One:

For C-corp, S-corp, or Partnership

  • Fill out the Business Legal Name (the name that appears on your business tax returns)

  • Fill out the Business Address (this the address where your business mail goes)

  • Fill out the Business EIN/TIN

  • Fill out DBA (if applicable)

For I099/Self Employed/Sole-Proprietors

  • Business Legal Name - Put your First and Last name

  • Business Primary Address - Put your home address or where you receive mail

  • Write in your SSN

Note: Don’t forget to put your phone number and email


Please see the sample screenshot of an application:

Screenshot 1

Part Two:

Enter the Payroll amount that you calculated above for employees (not including IC), multiply by 2.5 and then enter the value.


Add the outstanding amount of an EIDL made between January 31, 2020 and April 3, 2020, less the amount of any “advance” under an EIDL COVID-19 loan, to Loan Request as indicated on the form.

If you do not have a current EIDL/EEIG - do not add the $10K advance.

Screenshot 2

Part Three:

  • Number of Jobs - this is asking for number of FTE (meaning full time employees)

How to Determine FTE:

The calculation of full-time equivalent (FTE) is an employee's scheduled hours divided by the employer's hours for a full-time workweek. When an employer has a 40-hour workweek, employees who are scheduled to work 40 hours per week are 1.0 FTEs. Employees scheduled to work 20 hours per week are 0.5 FTEs.

How about multiple part time employees?

Let's say you have three employees. One works 40 hours a week, the other works 35 hours a week, and the third works 30 hours a week. You need to do a calculation to determine how many FTE's you have. 

The simplest calculation is to add up the total hours worked by all three employees and divide that total by 40. The total of 105 hours divided by 40 is 2.63. You have 2.63 full-time equivalent employees. (Source:  TheBalanceSMD)

Note: Don’t forget to add yourself as an employee if you are on payroll. 

Part Four:

Purpose of the loan:

Select everything applicable (just don’t put that you will take the money to buy a new car…)

Applicant Ownership

Put ALL the names of the Owners that own 20% of the business or more

If you are 1099/self employed - put your name, 100% ownership, SSN and mailing address. 

Screenshot 3


If you were ever delinquent (question 2) on an SBA loan

  • Answer NO if you were NOT delinquent during that time frame.

If you own another business (real estate, consulting, etc):

  • Answer NO if you don't own any other business.
  • Answer YES if you do and include supporting documents.

If Applicant is refinancing an Economic Injury Disaster Loan (EIDL) (question 4):

  • Answer NO on question 4 if you have not received an EIDL (even if you recently applied for it).

If you did not receive an EIDL loan between this time:
  • Do not add the $10,000 advance the payroll calculation.

Aside from that, all other questions are self explanatory. 

Note: Must use funds to buy American made products (haha, oh trump) 

Final Step:

Make sure Initial each section as indicated then sign, title and date. Make a copy for yourself. Any questions - please verify with your lender. 

"I wish everyone the best in this process.  I hope we can all persevere and make it through this challenging time"

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About Julie Phan

Dr. Phan is the co-owner (along with her husband, Toan Nguyen OD) of a highly successful optometry private practice in San Marino CA while also running a Sam’s Club sublease in nearby San Bernardino. Always the entrepreneur at heart, Dr. Phan also invests in rental properties. Through leveraging a talented team of realtors, contractors, and property managers spanning five states, Dr. Phan has steadily built a real estate business that generates consistent passive income. Along the way, she hopes to inspire friends, family, and colleagues about the value of real estate investment so they can work towards their own financial independence. Follow Julie's REI Journey on IG @ house_hustle at instagram.com/house_hustle/

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