Be prepared to apply for the SBA Paycheck Protection Program Loan

The SBA Initial Paycheck Protection Program (First Draw)

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Paycheck Protection Program Eligibility

An applicant is generally eligible for an Initial PPP Loan if:

  • Paycheck Protection Program launch: February 15, 2020
  • Has not previously received a Paycheck Protection Program loan (from BitX or another Financial Institution); and
  • Has no more than 500 employees

Max Loan Amount & Term

  • 2.5X Average monthly payroll, up to $10 million ($20 million corporate group cap)
  • 5-year term

Eligible Expenses

  • Payroll Costs
  • Business rent &lease agreements
  • Business mortgage interest
  • Business utility payments
  • Covered operational expenditures
  • Covered personal protective equipment (PPE) expenses
  • Covered property damage expenses
  • Covered supplier expenditures

Loan Forgiveness for the Paycheck Protection Program

  • May be eligible for loan forgiveness if proceeds are used on payroll and other eligible business expenses:
  • Employee and compensation levers are maintained; and
  • Minimum of 60% must be used on payroll costs

What documentation do I need to supply when applying for the PPP?

  • Gather your ownership information, including your Tax Identification Number and breakdown of ownership.
  • Gather documentation to establish that the business was in operation on February 15, 2020
  • Gather and Scan PDF Copies of 2019 and/or 2020 Year-to-Date payroll documents

 

Documentation to demonstrate the loan amount may include but is not limited to, the following:

For Businesses with Employees (if applicable):

  • 2019 and/or* 2020 IRS Quarterly 940, 941 or 944 payroll tax reports
  • Payroll statement or similar documentation to demonstrate operations on 02/15/2020
  • For S or C Corps: Equivalent payroll processor records or IRS Wage and Tax Statements), along with the filed business tax return (IRS Form 1120 or IRS 1120-S)
  • Summary of payroll expenses for Individual Employees with salaries over $100,000
  • K-1 (IRS 1065) for Partnership Self Employed employment income
  • General Ledger Reports or statements to assist with Health Care and Retirement benefits
  • State Quarterly Wage Reporting Forms

For Sole Proprietorships and Independent Contractors (if applicable):

  • Form 1099 -MISC (Independent Contractors only)
  • Form 1040 Schedule C or F for 2019 and/or* 2020
  • Payroll tax filings
  • Payroll statement or similar documentation to demonstrate operations on 02/15/2020
  • Bank Statements to demonstrate payroll disbursements
  • General Ledger Reports or statements to assist with Health Care and Retirement benefits
  • State Quarterly Wage Reporting Forms *2020 required for Second Draw PPP Loans to demonstrate a reduction in revenue

The SECOND SET of Paycheck Protection Program Loans (Second Draw)

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Eligibility

An applicant is generally eligible for a Second PPP loan if the borrower:

  • In operation on February 15th, 2020
  • Previously received a PPP Loan (from BitX or another financial institution) and will or has used the full amount only for authorized uses buy the date of disbursement or the second PPP Loan;
  • Has no more than 300 employees combined with affiliates (unless NACIS 72, 511110 or 5151 then 300 per location; and
  • Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020; or if in operations for all of 2019, you many use annual gross receipts
  • Has not nor plans to receive a Shuttered Venue grant
  • Additional eligibility requirements apply

Max Loan Amount & Term

  • 2.5X average monthly payroll, up to $2 million ($4million corporate group cap)
  • 3.5X average monthly payroll for Accommodations & Food Services loans (NAICS code 72), up to $2 million
  • 5-year term

Eligible Expenses

  • Payroll Costs
  • Business rent &lease agreements
  • Business mortgage interest
  • Business utility payments
  • Covered operational expenditures
  • Covered personal protective equipment (PPE) expenses
  • Covered property damage expenses
  • Covered supplier expenditures

Paycheck Protection Program Loan Forgiveness

  • May be eligible for loan forgiveness if proceeds are used on payroll and other eligible business expenses:
  • Employee and compensation levers are maintained; and
  • A minimum of 60% must be used on payroll costs

Two important notes for Second Draw PPP Loans applicants:

      1. If you received your initial PPP loan with another lender, the SBA loan number may be on your Note or you can contact the lender to obtain it
      2. Businesses also need to demonstrate a 25% reduction in gross receipts*
      • For loans above $150,000 – you must provide documentation demonstrating a 25% reduction in gross receipts for loans $150,000 and greater. Such documentation may include relevant tax forms, including annual tax forms, or, if relevant tax forms are not available, quarterly financial statements or bank statements
      • For loans $150,000 and less– you must certify the 25% gross receipt reduction in the online PPP application; however, documentation will not be required until applying for loan forgiveness. When you apply for your PPP loan, you will have the option to provide documentation at that time

     

    Note: the SBA’s definition of gross receipts includes: “all revenue in whatever form received or accrued (in accordance with the entity’s accounting method) from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances.” Gross receipts must be aggregated with gross receipts of its affiliates.

    What documentation do I need to supply when applying for the Paycheck Protection Program?

    • Gather your ownership information, including your Tax Identification Number and breakdown of ownership.
    • Gather documentation to establish that the business was in operation on February 15, 2020
    • Gather and Scan PDF Copies of 2019 and/or 2020 Year-to-Date payroll documents

     

    Documentation to demonstrate the loan amount may include, but is not limited to, the following:

    PPP Loans Businesses with Employees (if applicable):

    • 2019 and/or* 2020 IRS Quarterly 940, 941 or 944 payroll tax reports
    • Payroll statement or similar documentation to demonstrate operations on 02/15/2020
    • For S or C Corps: Equivalent payroll processor records or IRS Wage and Tax Statements), along with the filed business tax return (IRS Form 1120 or IRS 1120-S)
    • Summary of payroll expenses for Individual Employees with salaries over $100,000
    • K-1 (IRS 1065) for Partnership Self Employed employment income
    • General Ledger Reports or statements to assist with Health Care and Retirement benefits
    • State Quarterly Wage Reporting Forms

    PPP Loans For Sole Proprietorships and Independent Contractors (if applicable):

    • Form 1099 -MISC (Independent Contractors only)
    • Form 1040 Schedule C or F for 2019 and/or* 2020
    • Payroll tax filings
    • Payroll statement or similar documentation to demonstrate operations on 02/15/2020
    • Bank Statements to demonstrate payroll disbursements
    • General Ledger Reports or statements to assist with Health Care and Retirement benefits
    • State Quarterly Wage Reporting Forms *2020 required for Second Draw PPP Loans to demonstrate a reduction in revenue

AT BitX Funding We Say Yes!

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BitX Offers Multiple Options To Fit Your Business Needs

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Revolving Line of Credit

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Minimum Requirements

To pre-qualify for a loan with BitX Funding, you must have been in business for at least 1 years, FICO score of at least 650+ and or startups welcome.

  • TIME IN BUSINESS 1 YEARS
  • MINIMUM FICO SCORE 650
  • BUSINESS TAX RETURNS
    1 YEARS
  • PERSONAL TAX RETURNS
    1 YEARS

Compare our loans with other online lenders

BitX Funding  Online Lenders
Loan Size 5k to 5MM 2k to $500k
APR 6.75% to 30% 9% to 99%
Origination Fee Up to 10% Up to 15%
Repayment Terms Up to 20 years 6 to 60 months
Repayment Schedule Daily, weekly, monthly payments Daily or weekly

Who Qualifies for a Paycheck Protection Program Loan?

In order to qualify for a PPP loan, you must be a small business (including nonprofits, veterans organizations, Tribal concerns, sole proprietorships, self-employed individuals, and independent contractors) with 500 or fewer employees, or no greater than the number of employees set by the SBA as the size standard for certain industries.
Your business must have been operational by February 15, 2020. The “covered period” for these loans will run from February 15 to June 30, 2020.

Paycheck Protection Program Loan Rates and Terms

Loans disbursed under this program will have the following terms:

  • Interest rate of 1%
  • Maturity of 5 years
  • First payment deferred for six months
  • No collateral
  • No personal guarantees
  • No borrower or lender fees payable to SBA

Keep in mind: Business owners who take out these are eligible for loan forgiveness for the amount they spent on payroll costs, rent on a leasing agreement, payments on utilities, and additional wages to tipped employees.

That means your loan for these costs will essentially be converted into a grant.

You will need to demonstrate how you have used your funds to finance payroll and other eligible costs in order to receive loan forgiveness.

What do payroll costs mean? The following compensation is considered eligible payroll costs under this program:

  • Salary, wage, commissions, or similar compensations
  • Payment of cash tips or equivalent
  • Payment for sick, vacation, parental, family, or medical leave
  • Dismissal or separation allowance
  • Payments for group health care benefits, including insurance premiums
  • Payments for retirement benefits
  • Payments of state or local tax on employee compensation

Sole proprietors, independent contractors, and self-employed workers will also be able to take out a PPP loan for compensation or income that is not more than $100,000 in one year, as prorated for the covered period.

As for what payroll costs are not included: Compensation of an individual employee in excess of $100,000 annual salary; payroll taxes, railroad retirement taxes, and income taxes; compensating an employee that lives outside the U.S.; qualified sick leave or family leaves wages for which a credit is allowed under the Families First Coronavirus Response Act.

 

 

How Much Can I Borrow Through the Paycheck Protection Program?

The goal of this loan is to help businesses pay for their payroll and other overhead costs. Therefore, loan amounts can be up to 2.5x the business owner’s average monthly payroll costs, not exceeding $10 million.

For your loan to be forgiven by the SBA, you must maintain your payroll, or rehire the employees you laid off during the beginning weeks of the pandemic by June 30.

The amount of loan forgiveness will be lowered if you reduce workforce, or reduce wages paid to those employees by an amount greater than 25%.

The U.S. Chamber of Commerce created a helpful guide on how to calculate payroll costs and how loan forgiveness can be reduced.

 

Details of Paycheck Protection Program Loans

The Paycheck Protection Program was created and funded by legislation known as the CARES Act, which was signed into law on March 27 as part of phase three of the federal government’s response to the coronavirus pandemic.

The outbreak of the coronavirus across the U.S. has crippled millions of small businesses, forcing them to work under restrictions, with limited staff, and with virtually no foot traffic. These businesses are facing indefinite limitations and perhaps permanent closure if they are unable to make payroll, pay their rent, and meet other financial obligations.

Through the CARES Act, the SBA received $349 billion in funding that it used to finance loans made by thousands of SBA lenders across the country to those small businesses.

The SBA has long been known to small business owners as the best place to find low-cost financing on favorable terms. Even by those standards, PPP loans are exceptionally friendly to small business owners—since this pandemic has leveled small businesses across the board, through no fault of their own.

FAQ’s

In the case of the first or initial round of PPP loan, the maximum amount of money you can qualify for through the PPP is equal to 2.5 times your average monthly payroll costs or $10 million, whichever is lower. In the second round of PPP loans, the maximum loan amount of a Second Draw PPP Loan is 2.5x average monthly 2019 or 2020 payroll costs up to $2 million. The maximum loan amount for borrowers in the Accommodation and Food Services sector (use NAICS 72 to confirm), in Second Draw PPP Loan, is 3.5x average monthly 2019 or 2020 payroll costs up to $2 million.

The applicants generally qualify for an Initial or first draw of a PPP Loan if:

  • They were a part of Operation on February 15, 2020.
  • They have not previously received a PPP loan (from BitX)
  • They do not have more than 300 employees.

Yes, the Paycheck Protection Program (PPP) now allows specific eligible borrowers who have previously received an initial PPP loan to apply for the Second Draw of PPP Loan with similar loan terms as their First Draw PPP Loan.

An applicant generally qualifies for a Second draw on a PPP loan if:

  • The borrower was in operation on February 15th, 2020 and previously received a PPP Loan (from BitX or another financial institution).
  • The borrower will or has utilized the full amount of the loan only for authorized use by the date of payment or the second PPP Loan.
  • The borrower should have not more than 300 employees combined with affiliates.
  • The borrower can show at any rate a 25% reduction in gross receipts between equivalent quarters in 2019 and 2020, or if in the task for all of 2019, can use annual gross receipts.
  • The borrower has not nor planned to receive a Shuttered Venue grant.

Additional eligibility requirements may apply.

The Paycheck Protection Program (PPP) now allows maximum loan amount and increased assistance for accommodation and food services businesses. Most borrowers” maximum loan amount of a Second Draw PPP Loan is 2.5x average monthly 2019 or 2020 payroll costs up to $2 million. For borrowers who are in the field of Accommodation and Food Services sector, the maximum loan amount for a Second Draw PPP Loan is 3.5x average monthly 2019 or 2020 payroll costs up to $2 million.

Congress has approved an additional round of PPP funding. This time, they have expanded the list of who qualifies for PPP funding. All Businesses structures can be eligible, including:

  • Independent contractors
  • S-corps
  • C-corps
  • Faith-based organizations
  • LLCs
  • Private nonprofit businesses
  • 501(c)(3) nonprofits
  • 501(c)(6) organizations
  • Tribal groups
  • Veteran groups

In the case of both the first and second round of PPP loan, you can get forgiveness only if:

  • Proceeds are used on payroll and other eligible business expenses.
  • Employee and compensation levers are appropriately maintained.
  • A minimum of 60% must be used on payroll costs.

There is a limit of one PPP loan per tax ID. If you want to get a PPP loan for your second business, then you must have a separate EIN. In case you have availed the first draw of PPP loan and now want to benefit from the second draw of PPP loan, you can apply for it if you fulfill it is the eligibility criteria.