If your Amazon business has W2 employees, the PPP loan may be a tangible resource for you.
A long time Entourage client reached out to us to share this amazing resource to help sellers get government assistance with the Paycheck Protection Program (PPP).
What is the Paycheck Protection Program (PPP)?
The PPP is a government loan that helps businesses fund payroll costs.
Of particular note is that, if you meet certain employee retention criteria, the loan may be forgiven (completely). That means you keep the money and don’t pay it back.
Let’s repeat that: You keep the money and don’t pay it back.
When Should I Apply for the PPP Loan For My Amazon Business?
Amazon sellers who meet the proper criteria should apply right away. The process only takes about 15 minutes.
It’s important to apply ASAP as there is a limit to the amount of loans that can be approved. Once the money is gone, the opportunity is lost.
How Much Can I Get From The Paycheck Protection Program?
Amazon sellers may receive 2.5 times the amount they pay in monthly payroll.
For example, if you have $10k/mo in payroll expenses, you could be approved for up to $25k.
Then, if you follow the very specific guidelines and continue to meet all of the criteria, you may be able to have the entire loan forgiven.
How can Amazon Sellers Use the PPP loan funds?
- Payroll costs
- Insurance benefits
- Employee salaries and/or commissions
- Rent payments and/or mortgage payments
- Software or cloud computing costs for business operations
- Costs related to property damage and vandalism or looting due to public disturbances not covered by insurance or other compensation
- Costs of the supply of goods that are essential to business operations
- Covered worker protection expenditures that help adapt business activities to COVID safety requirements
If I Get Approved, How Do I Apply for Loan Forgiveness?
Here are three easy steps to follow to make sure you get any loan forgiveness you qualify for.
1. Contact your PPP Lender and complete the correct form
Your lender can provide you with either the SBA Form 3508, SBA Form 3508EZ, SBA Form 3508S, or a lender equivalent.
The 3508EZ and the 3508S are shortened versions of the application for borrowers who meet specific requirements. Your Lender can provide further guidance on how to submit the application.
2. Compile your documentation
Payroll (provide documentation for all payroll periods that overlapped with the Covered Period or the Alternative Payroll Covered Period):
- Bank account statements or third-party payroll service provider reports documenting the amount of cash compensation paid to employees.
- Tax forms (or equivalent third-party payroll service provider reports) for the periods that overlap with the Covered Period or the Alternative Payroll Covered Period:
- Payroll tax filings reported, or that will be reported, to the IRS (typically, Form 941); and
- State quarterly business and individual employee wage reporting and unemployment insurance tax filings reported, or that will be reported, to the relevant state.
- Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans that the borrower included in the forgiveness amount.
Non-payroll (for expenses that were incurred or paid during the covered period and showing that obligations or services existed prior to February 15, 2020):
- Business mortgage interest payments: Copy of lender amortization schedule and receipts verifying payments, or lender account statements.
- Business rent or lease payments: Copy of current lease agreement and receipts or cancelled checks verifying eligible payments.
- Business utility payments: Copies of invoices and receipts, cancelled checks or account statements.
3. Submit the forgiveness form and documentation to your PPP lender
Complete your loan forgiveness application and submit it to your lender with the required supporting documents and follow up with your Lender to submit additional documentation as requested.
Remember to always communicate with your lender throughout the process in a timely manner. If SBA undertakes a loan review of your loan, your lender will notify you of the review and the SBA loan review decision. You have the right to appeal certain SBA loan review decisions. Your lender is responsible for notifying you of the forgiveness amount paid by SBA and the date on which your first payment will be due, if applicable.
For more detailed questions and answers around specific application requirements, visit the U.S. Treasury Department’s PPP Forgiveness FAQs and updated guidance.
The link found in this article is a referral link to Smartbiz, who is facilitating the process. Smartbiz is being run by a longtime Entourage client, and we have personally applied for the PPP loan through their system to ensure that everything is 100% safe, legitimate, and clear. Any questions should be directed to them.
A portion of our commission will go to the Days of Nuggets foundation, which works to end child trafficking.
Please keep us posted on if you get approved. We’re rooting for you!