Updated Jan. 14, 2021

PPP Required Documentation

List of required PPP application documents

1. Completed PPP Application Form

• • Include your contact name and email address.
  • List the names of all owners (over 20%).
  • Indicate your Business Type (Independent Contractors and Sole Proprietors have slightly different document requirements.
  • Check Yes or No for all questions on the form.
    • If you answer Yes to questions 1,2, 4, or 5, you do not qualify for a PPP loan.
    • If you answer Yes to question 3 or 4, you may still qualify, but you must include an Addendum on a separate sheet explaining the details.

2. Average monthly payroll costs (only applies to businesses with employees)

Here’s a guide on what may classify as payroll expenses:

• • Payroll costs include: employee salary, wages and commissions; payment of cash tips; payment of vacation; parental, family, medical or sick leave; allowance for dismissal or separation; payment required for group health benefits (including insurance premiums); or payment of state or local tax assessed on employee compensation; and for sole proprietors or independent contractors, income or compensation not in excess of $100,000 per employee.
  • Payroll costs exclude: compensation of an individual person in excess of $100,000 (when annualized); compensation to an employee whose principal residence is outside of the U.S.; qualified sick leave for which a credit is allowed under Section 7001 of the Families First Coronavirus Response Act; and qualified family leave wages for which a credit is allowed under Section 7003 of the Families First Coronavirus Response Act.
  • Show your work. Borrowers must “show their work” on how they calculated the requested loan amount, and retain the supporting documentation used to get to that figure.

3. 2019 Proof of Payroll Costs (or Self Income)

• • If you have employees (even as a partnership), you must provide one of these documents:
    • Copy Of 2019 Business Tax Return
    • IRS Form 940 for 2019
    • IRS Form 941 for 2019 (Please note this is a quarterly form, so you must include all four quarters unless you were established less than a year ago. If that is the case, then you need to provide a Form 941 for every quarter since you were established
    • IRS Form 944 for 2019
    • If your 2020 Business Tax Return is not filed, please provide (1) of the following:
      • Payroll Verification: 941s for 2020 or 944 for 2020
    • Payroll processor records from a PEO (Professional Employer Organization)
  • If you are a partnership without employees, you must provide:
    • 2019 Schedule K-1 (IRS Form 1065). [See here for more info.] Check profit noted on line 14a. If you have no employees and line 14a is $0 or less, you do not qualify for a PPP loan.
  • If you are self-employed as a sole proprietor or independent contractor without employees, you must provide a 2019 IRS Form 1040 Schedule C, to prove your own income. Check profit noted on line 31. If line 31 shows $0 or less, you do not qualify for a PPP loan.
  • Proof of health insurance payments may also be accepted (but are not required) as part of the lender’s document review and loan calculation process. For Sole Proprietors & Independent Contractors, receipts and invoices showing payments can be in your name. All other types of companies should share receipts, invoices, or a PEO report if available in the name of the business (not your own name).

4. Proof of Ownership

You must provide each owner’s name and Social Security Number (SSN), Taxpayer Identification Number (TIN), or Employer Identification Number (EIN), plus one of these documents listed below, as applicable to your business type. (If your business has more than one owner over 20%, you must list the percentage of all owners).

• • For corporations (with employees) and partnerships:
    • 2019 Schedule K-1 (IRS Form 1065). [See here for more info.]
    • 2018 Schedule K-1 (IRS Form 1065) may also be acceptable if the primary owner provides a written statement that ownership has not changed since 2018 or detailing how the ownership has changed.
    • Articles of incorporation (with SSN) if they show ownership, and must show % of ownership to be acceptable.
    • Bylaws or operating agreement if they show ownership, and must show % of ownership to be acceptable.
  • For Sole Proprietors and Independent Contractors:
    • • 2019 IRS Form 1040 Schedule C that shows business name and owner name, or
      • 2018 IRS Form 1040 Schedule C may be acceptable if the primary owner provides a written statement that ownership has not changed since 2018 or detailing how the ownership has changed.
      • IRS Form W9 (for Independent Contractors only).

5. Unexpired, Government-issued Driver’s License or Passport for All Owners Over 20%

Each owner must be accounted for in the PPP application form. Along with each owner’s TIN, EIN, or SSN, lenders will also require a government-issued ID such as a Passport or a state-issued Driver’s License.

6. Email Addresses for All Owners with 20% or More of the Business

7. Electronic Funds Transfer Information

So the lender can deposit approved funds into your account, you may be asked to provide a bank statement (either an electronic [pdf] or scanned copy) showing both the name on the account and the account number. If the account number is misidentified, the wrong bank account will be credited.

• For independent contractors and sole proprietors, the bank statement can be in the owner’s name.
• For all other business types, the bank statement must be in the business name.

8. Proof of Business Operation and Active Status with North Carolina Secretary of State

To verify that your business is Active and in Good Standing, you need to provide either a pdf or just a screenshot of the certificate from the Secretary of State website showing your business is both Active and in Good Standing. It must be current for the month you apply for the PPP loan.

Note: this certificate is not required for Independent Contractors and Sole Proprietors. However, to prove you were in operation as a sole proprietor or contractor, you’ll need to provide a 2020 invoice, bank statement, or book of record establishing that you were in operation on or around February 15, 2020.

If your business requires a certificate, we have included the NC Secretary of State website below.

• North Carolina
  To verify your business’s status, search the business search portal on the North Carolina Secretary of State website, where you can register and order a certificate.

Learn more details

For a description of the loan terms for the PPP, the SBA provides a summary here. See also the U.S. Chamber of Commerce’s CARES Act Guide for Employers, or their Guide for Independent Contractors.

Disclaimer: This information has been aggregated from external sources. M&F Bank does not provide financial, legal or accounting advice. This content has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for financial, legal or accounting advice. You should consult your own financial, legal or accounting advisors before engaging in any transaction.