Paycheck Protection Program Calculator

What is the Paycheck Protection Program?

The Paycheck Protection Program (PPP) was originally authorized as part of Congress’ Coronavirus Aid, Relief and Economic Security (CARES) Act. It has been reauthorized and expanded through the passage of the ‘‘Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act’’. PPP loans are a SBA loan that is up to 100% forgivable and available to eligible small businesses through any SBA approved lender including Funding Circle. The Paycheck Protection Program, which is available through May 31, 2021 or until funds have been exhausted (whatever comes first), is meant to incentivize business owners to keep employees on the payroll at the same or a comparable salary. As a result, the features and factors that go into calculating your COVID–19 relief loan — from the amount you can borrow to the amount eligible for forgiveness — is derived based on your monthly payroll expenses for the time period between 8 and 24 weeks after origination.

Tell me more about this business loan forgiveness feature

Up to 100% of the PPP loan can be forgiven if the funds are used in accordance with the rules as prescribed by the SBA. At least 60% of the loan must go to covered payroll costs and the rest to covered non-payroll expenses:

Payroll costs such as:

Employee salaries (including commissions and tips)
Healthcare coverage (including group life, disability, vision, or dental insurance)
Retirement benefits
Vacation and paid leave (family, medical, etc.)
Taxes addressed on compensation

Non-payroll costs such as:

Rent payments
Utility bills
Interest payments (not principal payments) on mortgages or debt incurred before February 15th, 2021
Covered operations expenditures: Payment for any software, cloud computing, and other human resources and accounting needs.
Covered property damage costs: Costs related to property damage due to public disturbances that occurred during 2020 that are not covered by insurance.
Covered supplier costs: Expenditures to a supplier pursuant to a contract, purchase order, or order for goods in effect prior to taking out the loan that are essential to the recipient’s operations at the time at which the expenditure was made. Supplier costs of perishable goods can be made before or during the life of the loan.
Covered worker protection expenditure: Personal protective equipment and adaptive investments to help a loan recipient comply with federal health and safety guidelines or any equivalent State and local guidance related to COVID-19 during the period between March 1, 2020, and the end of the national emergency declaration.

But what’s the size of your loan? That’s where the PPP Loan Calculator comes into play.

The Paycheck Protection Program, which lasts through May 31, 2021 or until funds have been exhausted (whichever comes first), is meant to incentivize business owners to keep employees on the payroll at the same or a comparable salary. As a result, the features and factors that go into calculating your COVID–19 relief loan — from the amount you can borrow to the amount eligible for forgiveness — is derived based on your monthly payroll expenses for the time period between 8 and 24 weeks after origination.

What’s the payroll loan calculator?

Payroll is such a broad term. There’s little doubt that you are wondering just like many other business owners like you what this encompasses. Payroll costs include:

Salary, wages, commissions, or tips. These have a ceiling of $100,000 annualized per employee
Employee benefits across vacation costs; parental/family/medical or sick leave; an allowance for separation/dismissal; healthcare costs including insurance premiums; retirement benefits
State and local taxes on compensation
Self–proprietor or independent contractors — wages, commissions, income, or net earnings from self–employment with a ceiling of $100,000 annualized per employee

The Funding Circle CARES Act SBA Loan Calculator will help you determine the amount you can likely borrow, based on a set of relevant criteria. Below, use the calculator to enter your business information and determine the size of the COVID–19 relief loan you may qualify for.

The Funding Circle CARES Act SBA Loan calculator will walk you through a series of questions, beginning with whether you were in business on Feb. 15, 2020. You will also need to know what your total payroll costs were in the last 12 months.

Based on those criteria, the SBA Loan Calculator will tell you the amount you may qualify for, so you don’t have to do any back–of–the–napkin math on your own.

How does the SBA determine the size of my loan?

To understand how the SBA determines the size of your PPP loan, we recommend reading the SBA guidance released on this topic as of January 17, 2021.

What else can I expect from a Paycheck Protection Program loan through Funding Circle?

PPP small business loans are 100% backed by the government and there are no borrower or lender fees to apply or obtain a PPP loan. If any portion of your PPP loan that doesn’t qualify for forgiveness, the remaining portion will carry a fixed interest rate of 1% for a five year term. On top of that, if a portion of your loan is not forgivable, you’ll get even more cash flow relief during COVID–19, considering that your first payment will not be due for six months after the SBA has reviewed your forgiveness application.

To be eligible for loan forgiveness, you must keep your payroll intact or speedily rehire any employees who were let go as a result of COVID–19. If the number of your staff or their salaries and wages decreases, the amount of the business loan that’s forgivable will be decreased as well.

Paycheck Protection Program loans issued by Funding Circle after June 5, 2020 will have a term of five years and have a cap of $2 million. Funding Circle urges business owners to apply for a PPP relief loan as soon as possible since funds are limited and will be issued on a first come first served basis. The Paycheck Protection Program has been fully exhausted and the program has ended. Learn more about other lending options through Funding Circle.

Is the Paycheck Protection Program a business owner’s only option?

In short, no: It’s not your only option. The SBA is also delivering emergency sources of capital through the Economic Injury Disaster Loan (EIDL) and the Economic Injury Disaster Grant. Business owners can access the application for an EIDL loan for up to $2 million right on the SBA website. The term for the loan is up to 30 years at a fixed interest rate of 3.75% for small businesses / 2.75% for nonprofits. One of the main criteria is that you must employ 500 or fewer people.

You can request an Economic Injury Disaster Grant of up to $10,000 through the EIDL application process with the SBA. The cash grant is forgivable if you direct the funds for acceptable reasons. These reasons include paid leave, payroll expenses, higher costs in the supply chain as a result of COVID–19, mortgage/lease payments, and other bills that can’t be paid as a direct result of revenue loss from the economic shutdown.

Similar to Paycheck Protection Program funds, EIDL loans, and grants are limited in nature, so time is of the essence.

Document Requirements

The required documentation for your Paycheck Protection Program application can vary by your entity’s filing status, if you’re applying for a First Draw PPP Loan or a Second Draw PPP Loan, and if you have employees. We will go over the different document requirements in the questions below.

In general, all applications will require the following documents:

A copy of an official ID document, such as a driver’s license, for all business owners who own more 20% or more.
Bank account verification by connecting via Plaid (more details on Plaid in the question below) or through providing a voided check.

Linking your bank account to your Funding Circle application is the fastest and most convenient way to provide verification of your bank account information. Linking your bank account helps to ensure that, if your loan application is approved, funds can be sent to you as quickly as possible.

Funding Circle understands the importance of keeping your financial information safe and secure. That is why we have partnered with Plaid. Plaid is used by many major banks and credit unions, such as American Express, and financial apps, such as Venmo. With Plaid:

Your data is encrypted using a combination of the Advanced Encryption Standard (AES 256) and Transport Layer Security, which helps keep your sensitive data secure and protected.
Funding Circle only has access to view your account information, such as the account owner’s name, account number and routing number.
Funding Circle never has access to your login credentials.

If your bank does not participate with Plaid or if you would prefer to provide a voided check instead, you may verify your bank account information by providing us with a voided check that shows the business name, account number and routing number.

If you filed a Schedule C in 2019 and do not have any employees (other than yourself), you will need to upload the following documents:

2019 1040 Schedule C
One 2019 business bank statement and February 2020 business bank statement

If you filed a schedule C in 2019 and do have employees (other than yourself), you can expect to upload the following documents:

2019 1040 Schedule C
2019 Form 941s for all four quarters
Q1 2020 Form 941 or February 2020 bank statement showing payroll debit(s) or a payroll statement covering February 15, 2020
If you have a 2019 full year comprehensive payroll report from payroll processor/PEO, you may submit that instead of submitting the Schedule C and the 941s

If you filed a Form 1120/1120s or a Form 1065 (you’re likely a Partnership or Corporation), you can expect to upload the following documents:

2019 Business Tax Return (including K-1s if you filed a 1065)
2019 Form 941s for all four quarters (if you have employees)
Q1 2020 Form 941 or February 2020 bank statement showing payroll debit(s) or a payroll statement covering February 15, 2020
If you have a 2019 full year comprehensive payroll report from payroll processor/PEO, you may submit that instead of submitting the first two requirements (2019 Business Tax Return and the 941s)

If you’re applying for your Second Draw PPP loan, you will be required to fill out a Proof of Revenue Reduction form as a part of our online application to demonstrate at least a 25 percent reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same 2019 quarter.

To prepare for this part of the application, you can review your business’s income statements (also called Profit and Loss statements) for 2019 and 2020. You can generate an income statement through any bookkeeping service you use to track your business's finances or request one from your bookkeeper.

We will ask for your quarterly Revenue and Expenses, and you will need to demonstrate a 25% or more reduction in revenue over one quarter in 2019 compared to the corresponding quarter in 2020. You only need to input numbers for one pair of quarters and do not need to input numbers for the rest of the quarters.