Short answer, no.
And the reason is that your 1099 contractors are by legal definition THEIR OWN COMPANY, just like you are. They can apply for their own PPP loan.
But you can still apply for the PPP as a sole proprietorship, the amount you paid your 1099 employees just makes no difference in the equation. At least not so far, the rules have changed quite a bit as these SBA options have developed and they may continue to change. All lenders I have worked with to date allow companies without employees to apply for this loan, the equation is just different.
To apply for the PPP loan as a sole proprietor or Schedule C company, you need to file your 2019 tax return. Then take the amount on Line 31 of your Schedule C, divide it by 12 and multiply it by 2.5. This is the max amount of loan you are eligible for.
Written by Laura Fleig, Fleig Financials, LLC
July 30, 2020
