As you know, we at Silverlandia are all about small businesses. That is why we are continuously highlighting local business ventures here on our website. That is why we make an effort to keep you informed about the effects of this pandemic on our fellow small businesses. Measures are being taken to give businesses access to resources. As part of the CARES Act, small businesses will be eligible for aid in the form of the Paycheck Protection Program and their loans. This is the breakdown of what you will be needing in order to apply to one of these loans.
Paycheck Protection Program Requirements
As part of the loan application for the paycheck protection program, you are going to need specific documentation in order to determine the extent of the loan. This will involve tax forms, payroll summaries, and similar documents that the lender will need.
- 2019 Form 940
- 2020 Form 941 Q1
- 2019 W3 Transmittal
- Payroll Summaries – (A list of the amounts paid to individuals)
- 2019 1099s
- 2018 Tax Return
- 2019 Tax Return – If not available, you can submit your 2019 Financial Statements
In order for the loan to be useful for your small business, you need to calculate the overall cost of your payroll and submit it as part of the application. This includes the following calculations:
- Gross W2 Salaries – The gross amount (pre-taxes) that an employee is paid.
- Medical Benefits – How much money goes to an employee’s benefits.
- Employer Retirement Contributions – How much money an employer contributes to their employees’ retirement.
- Employer Payroll Tax – The federal income, Medicare, Social Security, and federal unemployment taxes paid by the employer. (Payroll tax should be included in the payroll calculation, but this could change).
- Independent Contractors – The amount of money paid to independent contractors (non-employees) by the employer. There is confusion surrounding this and the Treasury is working to clarify it. Some banks, however, are already allowing it.