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We will now walk through the paycheck protection program or PPP application. This is a default application developed by the treasury department and your bank or lenders application may be slightly different but they should contain similar information. So the first section is going to ask you about the type of business entity. Now, this is your legal entity. If you have formed a corporation through your secretary of state, you will be checking the CRS Corp depending on which one you’re taxed as. If you formed a limited liability company through your secretary of state, you should be checking the limited liability box for all others. There is a little bit of confusion. Obviously a partnership is if you’re filing the form 1065 and you have not formed an LLC, a sole proprietor should be used if you’re following a schedule C contained on your form 1040 tax return. Again, you have not formed any entity formally through the secretary of state. If you’re checking this box. Now there is some controversy over what independent contractor and eligible self-employed individual status means. Those are exactly the same as being a sole proprietor. We do not recommend that you check either of these boxes as there is supposed to be a delayed application date associated with them and we’re not really sure that the SBA understands that there is no difference that those are also sole proprietors.
If your business is a private nonprofit, you would use that box as well as a veteran’s organization or tribal business. I don’t recommend using other and any case that I’ve heard of yet to the right DBA or a trade name versus the business legal name. The business legal name should be the formal name that was used with the secretary of state when forming your entity. If you are the ABC LLC doing business as Subway restaurant or McDonald’s, the trade name is what’s above the door. If you’re a retail location or what name you operate under as a doing business as. If your business legal name is the same, you do not need to list anything in the DBA or trade name. Your business address should be listed as well as your federal ID number. The only case where you should not have a federal ID number is if you were a sole proprietorship with no employees, then you may use your social security number, do your business phone contact and email address. All right, now when we reached down to the average monthly payroll number, this is against payroll costs as previously defined in our other videos, and in the calculation worksheets, you will list that number multiplied by two and a half.
Now they’re mentioning the EIDL here it says EIDL net of advance if applicable. So if you applied for an EIDL grant of the $10,000 or up to and you received that, you don’t need to enter anything at all. If you have an EIDL loan already outstanding, let’s say it was a $50,000 loan and you received the 10,000 in advance, you should be adding 40,000 basically if you have an EIDL loan, not the grant outstanding at the time of applying for the PPP, you should be listing that amount here and it will be added to your loan amount that you’re applying for the number of employees. Again with some controversy, we discussed this before. It is probably the number of people you have working for you, before the coven crisis began. The purpose of the loan, you could select more than one. I would suggest that you select payroll if you have a lease or mortgage, please list that. And also if you have utilities, I would not suggest marking the other button at all. Applicant ownership, now this is how who owns your business. If there are more than 20% owners, they all need to be listed. If they’re less than 20%, they do not. So there should be the owner’s name, percentage of ownership, their social security or federal ID number if it is indeed a business owner, and the address. If you need more space than these two lines, you would attach a separate sheet.
All right. Please note that it says of questions one and two below are answered. Yes, the loan will not be approved. So if you’ve been suspended, disbarred proposed for disbarment declared ineligible or voluntary excluded from participation in the transaction by the federal department or agency or presently involved at a bankruptcy, you cannot apply. Secondly, if you have ever obtained a director finance loan through the SBA and it is delinquent or you defaulted in the last seven years, you may not apply. All right, it’s also going to ask you some other common questions here. Is the applicant and owner of another business or have common management with, if you have multiple businesses, you should be describing that relationship on a separate sheet of paper attached as an Addendum A has the applicant received an EIDL loan between pay attention to these dates between January 31st and April 3rd so prospectively this was prior to the EIDL grant and all the changes to the application. If you did, you’ll mark yes there. To my knowledge, very few people have achieved the status of getting that loan in process before they had to have been very early in the process.
Alright. Next up number five and six. If you answered yes or no here, your loan will not be, I’m sorry. Yes, your loan will not be approved. So a number five and six, if you have any criminal issues going on pretty much you can read the description here. You’ll answer that you also need to initial to confirm your answer on questions five and six. In number six if you were in the past five years had any felonies are convicted of some things, please read that question, answer that appropriately. Again, initial it both five and six. We don’t want your application to be denied because you forgot to put your initials. All right. Your principal place of residence for all employees is it included in the applicant’s payroll calculation above if a is the United States, the principal place of residence for all employees. Now in an earlier position, we had the question of if the employee is working, their business address was outside the US this is asking if their residence is in the US are you a franchise that’s in the SBA franchise directory you can yes or no there.
All right. If you have further questions, please make sure you’re reading all of the certifications below. There are several different things here to make sure that you understand. You will want to initial each one of the certifications to show that you’ve read each one and understand what they’re telling you you’re going to need to use the funds for and the application of this loan. Once you reach the bottom, please make sure to sign, print your title. Please make sure you’re using the appropriate legal title. If you were in an LLC and you are the primary owner, you are likely a member. That should be your appropriate title. The only other title that should be used there as a managing member and that is if you have a manager-managed LLC. If your organization is a corporation, you should be signing either as president, vice president, secretary, or treasurer. Do not list owner as your title. If it’s an LLC or a corporation, that is not a valid legal title to allow you to sign a contract or take out a loan. If indeed you are a sole proprietor that’s fine, I would list sole proprietor as the title.
All right, please follow through and read the instructions. If you have any questions about any of the detail, I will tell you they’re pretty short and sweet. And there are a lot of, pieces of government requirement of disclosures here, but that is the application. Again, many of your banks or lenders may have this similar application in their own format, but if prior to going through that online, you’ve completed this application, you should have all of the information that they require. They may also require you to upload some documentation if you’re doing it online. So check those requirements prior to and make sure you have those documents ready and available.
Donna Bordeaux, CPA with CampgroundAccounting.com
What happens when you send two CPAs out into the relaxing outdoors to camp? You get CampgroundAccounting.com. Donna and Chad have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They camp and travel across the country every chance they get, so it’s just a natural fit that they focus their CPA skills on helping campground owners throughout the USA grow their businesses and minimize the impact of taxes. They understand the key performance indicators and specialized issued that face RV park owners every day.