Earlier this week, the SBA and Treasury issued new PPP Forgiveness guidance and new versions of the forgiveness application (including an EZ version) to take into account the Paycheck Protection Program Flexibility Act (Flexibility Act) that was signed into law on June 5th.

The Guidance is great for the Independent Contractors, Freelancers, and those who are self-employed.  According to the Treasury, they have “determined that it is appropriate to limit the forgiveness of owner compensation replacement for individuals with self-employment income who file a Schedule C or F to either eight weeks’ worth (8/52) of 2019 net profit (up to $15,385) for an eight-week covered period or 2.5 months’ worth (2.5/12) of 2019 net profit (up to $20,833) for a 24-week covered period per owner in total across all businesses.”  This means that if you do not have a lot of covered expenses like rent, business mortgage interest, or utilities, you opt for the extended covered period of 24 weeks (instead of the original 8) and will most likely receive full forgiveness.

The new PPP EZ Forgiveness Application applies to borrowers who fit one of the criteria below:

  1. Kept their employees wages within 25% of their pre-COVID-19 level and did not reduce the hours of their employees between January 1, 2020 and the end of the Covered Period.
  2. Kept their employees wages within 25% of their pre-COVID-19 level and the borrower was “unable to operate during the Covered Period at the same level of business activity as before February 15, 2020, due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020.
  3. Self-Employed, Independent Contractors, Freelancers, and any other business with no employees.

For some more details on these new rules, you can check out this great Forbes article from Brian Thompson

If you have not yet applied for the PPP due to fears that you might not qualify for forgiveness, now might be a great time to do so as you only have until June 30th to apply, and there is still over $100 billion in PPP funds available.  Before you do apply for the PPP, though, if your Indiana small business has been severely negatively impacted by the COVID-19 pandemic to the tune of 40% month over month loss, you can qualify for the Indiana Small Business Restart fund.  This fund will grant your business up to $10,000 depending on the revenue losses you incurred. You are eligible if your business:

  1. Is registered to operate in Indiana
  2. Had less than 50 employees at of 12/31/2019
  3. Had less than $5 million in revenue in 2019
  4. Was profitable in 2019
  5. Can demonstrate a monthly revenue loss of at least 40% compared to pre-COVID-19 revenues
  6. Did not have used funding from the Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL), or Community Development Block Grant (CDBG)

Also note that on Monday of this week, the SBA reopened the Economic Injury Disaster Loan Emergency Advance program to all eligible borrowers.  This is another great opportunity for small businesses, independent contractors, and self-employed individuals to try and recoup some losses experienced due to the COVID-19 shutdown.

Disclaimer:  As always, please know that we operate a Coworking space for independent contractors, freelancers, the self-employed and remote workers, we are definitely not CPA’s, so anything you see on our blog is just for your information and should not be considered advice as we do not know your specific needs or issues.  Please consult your CPA or Advisor.

After running out of money for the Economic Injury Disaster Loan Grants in mid-April, and only reopening to Ag businesses after the second tranche of funding was passed into law on April 24th, the EIDL Grants are now open to all small businesses, and allow for advance payments of the EIDL loan of $1000 per eligible employee.  This means that independent contractors, freelancers, and gig workers are eligible to receive a $1,000 grant that does not have to be repaid.  Also, you can qualify for the actual loan with some favorable terms.

sba EIDL small business Grant is reopen

This was the statement from the SBA, “To further meet the needs of U.S. small businesses and non-profits, the U.S. Small Business Administration reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal to all eligible applicants experiencing economic impacts due to COVID-19 today.”

The Paycheck Protection Program still has about $100 billion left in it, and most businesses who would qualify for that program have already applied, so it is great that this additional resource has opened back up, and could give some much needed assistance to small businesses and self-employed individuals who are still looking for clarity on how their business will rebound as our economy reopens.

I do not know how long this program will last, as they only passed an additional $60 billion when they refunded the PPP.  So talk to your accountant and fill out the application if you think this may be a good fit for your business.

If you are looking for some more information on how to fill out the app if you are an independent contractor or self-employed, here is a great synopsis from a Forbes Article:

“If you are an independent contractor, freelancer, or gig worker, here are some tips on filling out the application:

  • On the first question, check the third box as you are applying as an independent contractor or sole proprietorship.
  • You must add your Social Security number if you are applying as an individual independent contractor, freelancer, or gig worker.
  • The form will ask you for the gross revenues for the last 12 months for your independent contractor business and the “cost of goods sold.” You can estimate this based on what happened in 2019. Cost of goods sold means the expenses incurred in the process of providing your product or service as a freelancer, gig worker, or independent contractor.
  • Where it asks for “Owner” put your name and “100” percent owner.
  • It will ask for the date the business was established. This is the date you started doing freelance, gig work, or independent contractor work. Just estimate if you don’t have the exact date, but make sure it was before January 31, 2020.
  • The form will ask for the bank account to which you want the grant money direct deposited. You need the name of your bank, the account number (the middle number at the bottom of your checks), and the routing number (the number at the bottom left of your checks). See the question below on direct depositing.
  • For your business phone number, it’s okay to give your cell number.
  • “Is your business owned by a business entity?” The answer is no since you are an individual owner.
  • When the form asks for your business name, just enter your individual name if you don’t have a business name.
  • You can ignore the question “If anyone assisted you in completing this application …” unless you have in fact gotten help.
  • Make sure to check the box that says you want to apply for the $10,000 grant (although it will only be $1,000 for independent contractors, freelancers, and gig workers).

The form should take about 15 minutes to fill out. After it is completed and submitted, the SBA will give you a confirmation number, so keep a copy of that for any follow-up.”

As always, please know that we are not CPA’s, so anything you see on our blog is just for your information and should not be considered advice as we do not know your specific needs or issues.  Please consult your CPA or Advisor.

Hello everyone and Happy Monday.  There are a lot of small business webinars going on this week, from Protecting your business from Fraud to Reinventing your business and Raising Capital.  If you are interested in working on your small business, you may want to check these out and share with friends.

remote work
Google:  Enhance Your Project Management Skills with Google Tools – Part 1

Monday June 15 at 3:00

Learn how to create a successful project plan, organize your work, and track and share progress from start to finish using Google Docs and Google Sheets. Part 1 will focus on building an effective project plan.

Products: Google Docs and Sheets
Difficulty Level: Introductory

SCORE:  How Female Founders Can Innovate and Disrupt the World of Business

Tuesday June 16 at 1:00

In this webinar, four exceptional women entrepreneurs Laurel Delaney, Betsy Mikesell, Angie White and Dr. Sonat Birnecker Hart will provide insights for women who want to innovate and disrupt the world of business – to grow faster, stronger, and soar globally for a better tomorrow.

StoryBrand:  The One-Hour Website Makeover

Tuesday June 16 at 11:00 and 3:00

Every Day You Don’t Fix Your Website, It’s Costing Your Business Precious Revenue
You know your website needs work. But you don’t know how to make it better. And you feel overwhelmed by updating it. You have enough going on as it is.

But there’s good news — it’s easier than you think to fix it.

This webinar will kickstart your momentum to help you transform your website so it makes you more money.

Indy Chamber:  Reinventing and Reimagining your Business

Tuesday June 16 at 4:00

Disruptions cause loss but also uncover opportunities. Reimagining your business in the midst of major uncertainty requires curiosity, determination, and experimentation — all while rebuilding existing operations. Not easy. In this session Senior Lecturer Fred Schlegel will identify steps you can take to reinvent and reimagine your business for a post-COVID 19 world. How can you discover, choose, design and deploy new offerings with limited resources and time, and how can you engage customers, employees, suppliers, business partners, and investors in creating opportunities and improvements? How can you motivate employees to actively participate and drive the changes your business needs, and how can you structure and implement a process that drives the innovation you want?

SBA:  COVID-19 Funding Options for U.S. Rural & Agricultural Businesses

Thursday June 18 at 11:00

The SBA Great Lakes Region, along with our partners at USDA Rural Development and USDA Farm Service Agency, invite U.S. rural and agricultural businesses to join us for a livestream overview of COVID-19 funding options.

SCORE:  Protecting Your Business From Fraud

Thursday June 18 at 1:00

Are you familiar with the basic principles of assessing fraud risks for your small business?

This webinar, presented by Deluxe Chief Brand Officer Amanda Brinkman and U.S. Bank Financial Services Veteran Morris Jackson II, will cover smart tips for auditing your business finances as well as ways to monitor for potential risks to keep your business safe from fraud.

TechSoup:  How to Develop a Nonprofit Website Strategy for the Road Ahead

Thursday June 18 at 2:00

Digital communications have become more necessary. Join marketing experts, Joe DiGiovanni and Kyle Barkins from Tapp Network, as they walk you through the vital components of a website’s strategy to help your organization smoothly and effectively adapt to a post-COVID world. From re-aligning your website’s goals to implementing automation, you’ll be ready to use your website in a whole new way to get the results you need.

SBA – Federal Contracting Readiness Webinar
Year-End Buying Cycle – 4th Quarter

Thursday June 18 at 2:00

SBA 8(a) firms and other Small Businesses (SB) including: SDBs, WOSBs, EDWOSBs, VOSBs, SDVOSBs, HubZone SBs, and all other eligible small businesses that can form SB Teams and strategically position their firms to be awarded fixed price, cost plus, and other contract type awards. How do we position our firm to procure 8(a) Sole Source, Competitive 8(a) Contracts & Other SB Set-a-Side Awards During Year-End Buying Cycle? What contracting vehicle should we establish? What marketing and negotiating strategies should we develop, implement, and execute?

Indy Chamber:  Repositioning for Growth and Raising Capital

Thursday June 18 at 4:00

In this session, participants will receive a practitioner’s perspective on how to best position businesses for success and growth in the post-pandemic era. Ron Laufer, Managing Director with Acuris Partners, will discuss useful tools to assess strategic, financial and organizational options for the near and long term. Finally, participants will engage in a discussion on how the Covid pandemic and the resulting global economic crisis is forcing businesses to reevaluate their business models and identify new opportunities for the future.


Good luck and let us know if we missed any!

While last week we wrote about the new legislation that would ease restrictions on PPP Forgiveness, the goal posts have been moved again.  This weekend, the SBA and Treasury came out with a joint statement that brought back partial PPP forgiveness if the new 60% threshold was not attained.  This is welcome relief, as the wording of the legislation made it seem like if you did not spend 60% on covered employee wage expenses, you would not receive any forgiveness at all.

Time will tell if this will change, but for now it is a bit of good news.  If you would like more information on this statement, and what it means, please check out this article from Forbes.

There are a lot of small business webinars going on this week, from boosting Productivity while remote working to applying for PPP forgiveness.  If you are interested in working on your small business, you may want to check these out and share with friends.

Simple Ways to Boost Your Productivity While Working Remotely

Tuesday June 9 at 1:00

Working from home is not easy, especially if you’re new to the game.

Join us in this webinar, as award-winning CEO Bryan Caplan shares tips, tricks, and best practices to get yourself in the “work zone” and stay productive throughout your day.

By the end of this webinar, you’ll learn:

  • The importance of a morning ritual
  • Tips to keep you focused on your tasks at hand
  • Several tools that can help you communicate and collaborate with your teams
Make Better Decisions with Google Analytics – Part 1

Tuesday June 9 at Noon

Learn best practices and analyze trends about how customers engage with your business online, then turn these insights into well-informed, actionable decisions. Part 1 will focus on setting up Analytics, asking yourself targeted questions when analyzing data, and accessing the reports that will give you the most valuable insights into your customers.

Marketing in the COVID-19 Era

Tuesday June 9 at 4:00

This webinar provides participants with marketing strategies for keeping their firm’s product-line-solutions relevant to this “new normal” marketplace. Because of the virus pandemic, both business and retail customers are redefining how they purchase products in this new market reality. Businesses might ask if current solutions offered by their product lines still provide value to customers in the marketplace. What must firms do to win back existing customers and attract new business in these market conditions?  

Return to Work Guide for Employers

Wednesday June 10 at Noon

Returning your employees to work may be one of the greatest challenges you, the employer, may face. We will show you how to do it right.

Those attending this webinar will learn about: preparing for employees to return to work, specific new procedures that need to be implemented, considering flexible work arrangements, developing a telecommuting program for employees, and answers to frequently asked questions from various government websites . 

Sign up now for this live webinar presented by one of Indy’s top HR professionals.  There will also be an opportunity to have your questions answered.

Applying for PPP Forgiveness

Thursday June 11 at Noon

The Paycheck Protection Program (PPP), despite some early and ongoing challenges, has assisted thousands of Hoosier businesses. As Indiana continues its recovery from the pandemic, join us for important information to help your organization take full advantage of the forgiveness provisions of the program. Topics to be discussed include:

  • Full Time Employees (FTEs) – who counts, who is excluded?
  • Clarification on the payroll cost requirement
  • Besides payroll, what are other eligible costs?
  • How to handle compensation reductions
  • “Covered rent obligation” explained
  • Recordkeeping– what is required?
  • Red flags for lenders
  • Latest on additional guidance from the SBA
  • Plus, answers to your questions!
Managing Supply Chain Risks in a Post Covid-19 World

Thursday June 11 at 4:00

This session will cover the current lessons learned about supply chain performance during the pandemic. Specifically, this will address three questions: 

1. What have we learned about supply chain agility and adaptability during a global pandemic?  (The platinum rule.) 

2. What three things should every business be doing right now to build supply chain resilience? (The gold standard.) 

3. What are the supply chain opportunities for growth and value creation right now?  (The silver lining) 


Good luck and let us know if we missed any!

Last week we wrote about how the House of Representatives passed a law to ease the terms of Forgiveness for the Paycheck Protection Program. Wednesday afternoon the Senate unanimously passed the same bill by voice vote.  The bill will now head to the President’s desk to be signed into law.

Due to the fact that there is still about $130 billion of PPP funds left for small business owners in need, the criticism of the program has started to die down and now firms are starting to figure out how to attain forgiveness.  This new bill will give business owners more flexibility as they try to turn this loan into a forgivable grant.

What’s in the new PPP fogiveness guidelines?

Increased Covered Period:  This new bill would allow employers 24 weeks to attain forgiveness instead of the previous 8-week period.  This extended time frame gives employers more time to open up and hire back their employees, which can be important if they are still shut down or their industry is still facing headwinds from social distancing guidelines.  There is a clause that allows borrowers to make an election to have the original 8-week period apply to them instead.  If a borrower has already spent the proceeds according to the old rules, the will most likely want to utilize this election.

More Flexibility in Spending:  This bill will also lessens the percentage that needs to be spent on payroll from 75% to 60%, which will free up more PPP proceeds to be spent on rent, utilities, and interest.  This is important, because as the forgiveness period is moved to 24 weeks, the added costs of rent and utilities will also increase.  This provision, though is less likely to help the self-employed as they do not usually have a lot of overhead expenses, and their compensation replacement is already set at 8/52 of their 2019 net schedule C income.

There is a caveat, though.  While the old rules allowed for partial forgiveness if a borrower spent less than 75% on payroll costs, now there is no partial forgiveness.  If a business spends less than 60% of the PPP amount received, none of the loan will be forgiven and they have 5 years to pay it back at 1% interest (see it below).

Longer Payback Period:  Finally, this bill will allow the loan period to be moved from a 2-year loan to up to 5 years.  This will only matter when forgiveness cannot be attained.  Also, payment are not required to be made until the date that the SBA makes a determination on your particular forgiveness (which could take up to 5 months).  For instance, maybe you are not able to hire back your employees due to the uncertainty your business is still facing.  By extending the payback period, the payments will be smaller and more manageable for the PPP loan recipients.  Businesses could still pay back the loan early, though if your business seems to be regaining some clarity.

Deadline for Rehiring Workers is Extended – While the current rules will reduce forgiveness if the number of employees you had is not restored by June 30th, this new law would extend that date to December 31st.  This means that as long as at least 60% of your PPP amount is spent on payroll costs and the rest on covered rent, interest and utilities, and you restore your employee count to pre-COVID-19 levels by December 31st, you will receive complete forgiveness.

Again, if you are confident that you will attain forgiveness using the previous 8-week covered period, you should make that election, because who knows what business will look like 6 months from now.

Clarity on Rehiring Issues:  This new bill also provides guidance on whether or not you are able to rehire back workers.  This has been discussed at length by the Treasury and SBA in their guidance and FAQ and now it will be written into law.  If the employer is able to show in good faith that they could not find qualified employees to hire on or before December 31st including those who were employed on February 15, 2020, they would qualify for this exemption.  This may be harder to qualify now that the deadline has been extended to December 31 and expanded unemployment benefits currently are set to expire on July 31.

Another exemption to employee head count can attained if the borrower can show that it is not able to return to the same level of business activity it was experiencing on February 15 of this year due to the restrictions put in place by the CDC and other organization from March 1 to December 31 that involve maintenance of standards for sanitation, social distancing guidelines, or other customer safety requirements related to COVID-19.

Two Year Deferral on Payroll Taxes for All Borrowers:  Our final bit of clarity involves the employer share of payroll taxes.  The Social Security portion of the employer part of payroll taxes or 6.2% can be deferred.  Once deferred, 50% of the deferred taxes will need to be paid by 2021, and the other 50% will be due in 2022.  While this could be very helpful for cash strapped businesses, it could end up being an administrative headache.

While these new changes increase flexibility and will no doubt help more businesses attain the PPP forgiveness they so badly desire, it could add increasing complexity by pushing deadlines out to the end of the year, where there is likely to be less clarity.  If you are able to attain forgiveness using the previous 8-week period, it may be a good idea to go ahead and apply for it when your covered period is over, which could save you some headaches later.

If you would like to watch a webinar on PPP Forgiveness, the Indiana Chamber will have one next Thursday June 11th at Noon, which is presented by Ice Miller, LLP.


Disclaimer:  Please note that we are not CPA’s, so anything you see on our blog is just for your information and should not be considered advice as we do not know your specific needs or issues.  Please consult your CPA or Advisor.

There have been a lot of opinions and platitudes that have come out over the past week to discuss the killing of George Floyd, and the ensuing protests.  Systemic racism exists, and since we are devoted to developing a healthy entrepreneurship ecosystem in Hendricks County, we wanted to see if (and how) it showed up in small business data.  With this in mind I dove into several studies and looked at the numbers and found that we have to do better.  Minority-owned businesses (specifically Hispanic or black-owned), while starting at a similar rate, just do not grow at the same rate of their nonminority peers.  I welcome discussions on this topic and all of the information included in this post, but mostly I wanted to share the data that I found, so at least you could see it with your own eyes.

There is no doubt that small businesses of all sort face challenges.  Most are owner-operated firms with no other employees (nonemployer), so the business owner has to wear multiple hats and put out all the fires themselves.  Small Business owners and entrepreneurs also have additional stresses which can lead to depression, especially in times like these when you bring in all kinds of uncertainty into the mix.  Now, imagine if you add lower home values, lower credit approval rates, entrenched biases and discrimination to the mix.  This is the reality that many minority business owners face every day, and can be a huge reason their businesses do not grow at the rate of their nonminority peers.

We will examine this disparity in a 3-part series.  The first part, which we will be reviewing today, will go over the data, so we can see that a disparity exists.  Part 2 will look at some of the reasons for the disparity that result from years of systemic racism and why it matters.  Finally, Part 3 will look at some of the resources available to combat these issues, and what we can do to help.

Racial Disparity by the Numbers

In 2012 8 million minority-owned businesses contributed $1.38 trillion in revenue and 7.2 million jobs to the economy.  Also, from 2007 to 2012, which encompassed the great recession, a net 2 million minority-owned businesses were created while a net 1 million nonminority-owned businesses closed.  This increase was driven by a 34% increase in Black/African American business ownership and a 46% increase in Hispanic-owned businesses.

While those stats show a positive trend in minority business ownership, when we look further into the data we see that there is still room to grow.

When we dive into the numbers we see that even though minority-owned businesses are on the rise, they still do not represent their full share of the population.  For instance, while minorities made up 37% of the US population in 2012, they only made up 29% of all businesses and the numbers for the black community are 12.6% of the population and only 9.5% of all businesses.  The data for Indiana is not much better.  Black/African Americans made up 10% of the working age population in Indiana in 2012, but only had a 7% share of all businesses, and only a 1% share of all Indiana employer businesses.

If these trends continue, we could reach parity in business ownership levels in relation to population.

When we dive even deeper into the numbers we find a large disparity in the average number of employees and the average of sales for each business.  For another example, let’s take a look again at black/African American owned businesses.  While this cohort made up 9.5% of all businesses in 2012 they only made up 1.7% of all employment and 1.3% of all sales.  For Hispanic-owned businesses the numbers are 12.2% of all businesses, 4.0% of all sales and 4.2% of all employment, which is a bit closer to parity.  When you compare those numbers with the fact that nonminority-owned businesses made up 71% of all businesses but 88% of all sales and 86.5% of all employment you begin to get a picture of just how big the disparity is.

Now, lets take a look at sales receipts per firm from 2012.  For our black/African American business owner friends, we see that their average gross receipts were $58,000 while Hispanic-owned businesses were about 2.5 times greater ($143,000) and nonminority owned businesses were more than 9 times greater ($546,000).  These numbers are mitigated a bit when you take out  nonemployer firms.  When this is done, you see that the average sales are $948,000 for black/African American-owned firms, while Hispanic-owned firms are 1.5 times greater ($1.3 million), and nonminority-owned firms are  2.5 times greater ($2.3 million).

One reason for the huge discrepancy in the gross receipts per firm can be pointed back to the average employees per firm.  For nonminority-owned businesses, ~22% firms are employer firms compared with 8.7% of all Hispanic-owned firms and just a mere 4.2% of all black/African American-owned firms.

I know, I know, so much data.  I am sorry as no one really wants to see this many numbers, but I am trying to share the information.

Credit Disparity

Please bear with me a little while longer as we discuss credit, which is probably where the most eye-opening data exists.

In the Federal Reserve Board’s 2016 Small Business Credit Survey we move forward 4 years in time and look at the results from over 12,000 small businesses.  This data points us to the fact that black-owned firms were less profitable, had lower funding approval rates (by 19%), and received a smaller percentage of the requested amount than their whited-owned business counterparts.  Another shocking stat was that 40% of nonapplicant black-owned firms did not even apply for financing because they were discouraged, and those that did apply usually steered clear of small banks, but instead opted to apply at CDFIs (community development financial institutions) or online lenders.

In a report from 2016, The Ewing Marion Kauffman Foundation dove into some more credit data from the 2014 Annual Survey of Entrepreneurs to give us some more insights.  This data shows us that the more minority-owned businesses faced negative impacts on their profits from the cost of capital or access to financial capital, as compared to their nonminority peers (16% vs 10%).  As we dive deeper, we find that the profits of black entrepreneurs were even more negatively impacted.   For this group, their profits were 3x more likely to be negatively impacted by access to capital and 2x more likely to be negatively impacted by the cost of capital than their white peers.

There is a boatload of data out there that continues to confirm these disparities, but I will save you the boredom of reading any more of it.  If you would like to read for yourselves, you can check out the links below:

2016 FED Small Business Survey

Minority Business Ownership:  Data from the 2012 Survey of Business Owners

Businesses owned by women and minorities have grown. Will COVID-19 undo that?

Startup Financing Trends by Race:  How Access to Capital Impacts Profitability

THE STATE OF MINORITY BUSINESS ENTERPRISES:  An Overview of the 2012 Survey of Business Owners

Entering Entrepreneurship: Racial Disparities in the Pathways into Business Ownership

We will examine some of the reasons these disparities exist in Part 2 of this series.

I understand that some may disagree with the information from this post, but I just wanted to show some data and start a discussion.


John C. Anderson

Level Two Inc – Executive Director



On Wednesday we wrote a blog post about the PPP Forgiveness process.  And true to form, lawmakers are already throwing a wrench in how and when forgiveness may be awarded for small businesses.  Yesterday, the House of Representatives voted to ease restrictions on how the PPP could be spent.  Now, this has yet to pass the Senate, and time will tell if it will as the Senate will not be back in session until next week.  Then, if it does pass the Senate, it will have to be signed into law by President Trump.  The Senate also introduced a similar bill, but have yet to pass it.

So let’s look at the differences in the two bills.

House Bill Summary on PPP forgiveness (passed yesterday):

  • Reduce the share of aid money small business are required to spend on payroll from 75% to 60%
  • Extend the window businesses have to use the funds from two months to six months
  • Push back a June 30 deadline to rehire workers
  • Extend the time recipients have to repay the loan
  • Let companies that get loan forgiveness defer payroll taxes

Senate Proposed Bill Summary on PPP forgiveness:

  • The bill would extend the time frame in which businesses needed to spend the money from 8 – 16 weeks
  • Push back the deadline to apply to the end of the year (from June 30th)
  • Ensure lenders weren’t liable for certifications provided by borrowers
  • “Allow borrowers to use loan funds to purchase personal protective equipment for employees and to pay for adaptive investments needed to reopen safely,”

Obviously there are some differences here, and some Senators are already giving push back to the House Bill that just passed, but it is likely that restrictions will ease to some degree.

Benefit to Independent Contractors and Self-Employed individuals:

While the time to add back employees is not a factor for the Self-Employed, allowing borrowers to use loan funds on other sources and giving them extended timelines would definitely be helpful.  Due to the fact that we have some time, it may be helpful to not apply for forgiveness until we have a bit more clarity on how the PPP restrictions may be eased.


Disclaimer:  Please note that we are not CPA’s, so anything you see on our blog is just for your information and should not be considered advice as we do not know your specific needs or issues.  Please consult your CPA or Advisor.


On May 18th, the SBA and Treasury came out with the long awaited PPP Forgiveness application with some preliminary guidance.

Then, two days later on May 2o, they issued “final” guidance.  They may release even more guidance as we move forward, but we seem to have a good start, so let’s dive in.

If you have employees, you can visit the following sites to get more information:

How to Fill Out Your PPP Forgiveness Application Form

May 22 PPP Final Interim Rules Provide Further Guidance And Some Surprises


First, we will define two important terms:

PPP Loan Disbursement Date: This is the date that the loan funds showed up in your bank account, which is very important because it starts your Covered Period.

Covered Period:  The eight-week period beginning on the date you received the loan funds and ending 8 weeks later.

Second, let’s look at some important information:

If you want to include utilities, mortgage or loan interest, or lease payments in the forgiveness, they had to be in place before February 15th.  There will be no adding fancy cell phone packages or office spaces to up your forgiveness amount.

The applications cannot be submitted until after the covered period ends, but should be submitted as soon as possible.  You may need to wait in order to get your next months utility bills to factor those costs in.

Once your PPP Forgiveness Application has been submitted to your lender, they have 60 days to review and request payment from the SBA, who then has an additional 90 days to review and then remit the appropriate forgiveness amount to the lender.  After the SBA has made their decision, the lender is responsible for notifying you.  This means that you could be waiting for up to 5 months to receive confirmation that your loan was forgiven.

Finally, you will need to submit the required documentation listed on page 10, and they also give you a list of documents to keep “for six years after the date the loan is forgiven or repaid in full.”

Now down to business. 

The application has 5 parts.

  1. The Application (pages 1-4)
  2. Schedule A (pages 5-6)
  3. Schedule A Worksheet (pages 7-9)
  4. List of required documents  (page 10)
  5. OPTIONAL PPP Borrower Demographic Information Form (page 11)


This is the last page, but I encourage you to do this first.  Everyone hates to answer these types of questions and there is quite a bit of skepticism over what is really done with the data.  I think and hope the SBA will utilize these stats to see who this program has helped and to find out which groups have been left behind, which in turn could help them develop a better program the next time a need arises.

Schedule A Worksheet and Schedule A

Self-Employed individuals, independent contractors, owner-employees should not have to fill out Schedule A Worksheet or lines 1-8 on Schedule A, so you can move directly to Schedule A number 9.  This number was your net income from self-employment last your, which can be found by dividing the amount on line 31 of  your 2019 Schedule C by 52 and then multiplying that number by 8 (up to $15,385).  Since you did not have to fill in lines 1-8, line 10 is the same number as line 9.  Lines 11-13 will also not apply, so you can move on to the actual application.

PPP Application

After you fill in the necessary business information, you can copy the information from Schedule A Line 10 on Line 1.

Lines 2-4 can get a bit complicated if you do not have an office space.  If you have an office space, you include costs that are either paid or incurred during the covered period, just remember not to double count expenses to try and get extra forgiveness.  If you have a home office, and it was set up and in use as a deduction on your 2019 taxes, you can use that formula to figure out how much mortgage interest, lease payments, or utilities to input on these lines.  One thing to keep in mind here is that if you use PPP to pay a portion of these home office expenses, you most likely will not be able to deduct that portion on your 2020 taxes.

Line 5 does not apply to those without employees.

Line 6 is the total of Lines 1-4, and Line 8 should be the same as line 6.

Line 9 is the total amount of your loan.

Line 10 is the value of line 1, which is your “owner compensation replacement” divided by 0.75

Line 11 is just the smallest number from Lines 8,9, and 10

Here Come the Certifications

Check and double check your math and information, so that you can certify that everything on your application is right, and that you are using them for the correct purposes.  We all remember the hullabaloo that ensued with the last PPP certification.   

And there you have it, your Self-Employed Payroll Protection Program Loan Forgiveness Application is complete.  

If you need a deeper dive with examples, you can visit this article on Forbes.

Also, if you need information on PPP Forgiveness with employees you can visit the links below:

How to Fill Out Your PPP Forgiveness Application Form

May 22 PPP Final Interim Rules Provide Further Guidance And Some Surprises


Disclaimer:  Please note that we are not CPA’s, so anything you see on our blog is just for your information and should not be considered advice as we do not know your specific needs or issues.  Please consult your CPA or Advisor.

In our ever changing world, we aim to keep you up to date on all of the recent changes.  Here are some new additional resources that have just come to our attention.  These resources include a small business grant for Town of Plainfield small businesses, the Indiana Small Business PPE exchange, and the new application that you will use to receive forgiveness from the PPP.  Also, do not forget that Back on Track Indiana Stage 3 starts this weekend, and here are a few guidelines on what that looks like.

  • Hoosiers 65 and older and people with known
    high-risk medical conditions should limit
    exposure at work and in their communities
  • Continue remote work when possible
  • Face coverings are recommended
  • Social gatherings of up to 100 people
    may take place following the CDC social
    distancing guidelines


12 Week Virtual Acceleration Program.

Our friends up at MatchBOX (a coworking space in Lafayette, IN) have set up a 12 week virtual acceleration program called MatchBOX Venture Development.


Rapid Recovery Series by the Indy Chamber

The Indy Chamber is launching the Rapid Recovery Series beginning May 26.These virtual courses will be led by Kelley School professors and are crafted to teach small business owners best practices and strategies on how to effectively reopen and recover from the COVID-19 pandemic.


Here are the other links to resources that you may find useful.

Indiana Small Business PPE Exchange

Town of Plainfield Small Business Grant

SBA Small Business PPP Forgiveness Application

Creating a Return to Work Action Plan

Sample Return to Work Action Plan

Gener8tor Next Steps Webinar

LinkedIn Tips and Tricks part 1

Web Writing Made Easier

Look for a new article with more information on PPP Forgiveness on Tuesday morning!  Have a great Memorial Day Weekend.


John C. Anderson

Level Two Inc