The Contractor’s Quick N’ Easy Guide for the 1099 PPP Loan: Steps to Apply

Justin W. Jones, EA, JD
September 21, 2022
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On January 14th, 2021, Congress passed a new stimulus bill making the Paycheck Protection Program (PPP) available for 1099 contractors and sole proprietors.

Between now and next Tuesday (March 9th), any freelancer, sole proprietorship, or 1099 contractor who lost income due to the pandemic can get up to $20,833. It’s essentially free money because as long as you follow the instructions, you won’t need to pay it back.


Figuring out if you qualify

Unlike the initial version of the PPP program last year, this bill was designed to aid the smallest businesses or freelancers, sole proprietors, independent contractors - anyone left behind in the previous coronavirus relief efforts.

There are only two key eligibility requirements:

  1. You started freelancing or other 1099 contract work in 2019
  2. You saw at least a 25% reduction in your 1099 income in 2020, as compared to 2019

How to apply

Step #1: Gather your documents.

You’ll need to show proof you are an independent contractor by showing your book of records, invoices, bank statements, and other records. A copy of your 2019 and 2020 IRS tax returns will do the trick. You may also want to provide invoices, bank statements, and 1099 forms.


Step #2: Submit the application

Almost every big bank and financial institution is processing applications, but big banks may be a bit slower. We at Keeper Tax have been impressed with SmartBiz Loans, which makes this whole process fast and quick without charging any fees to you. You’ll need to fill out this form and then give it to a bank or lender for processing. Lastly, you can also use this link to find a bank that will accept your application.

Step #3: Apply for PPP loan forgiveness

For independent contractors and gig economy workers, an eight-week period of PPP funding will be automatically forgiven as a salary replacement. All you’ll have to do is submit this form.


Let’s break it down step-by-step (Smartbiz)

In this next section, we’ll take you by hand and show you exactly how to fill out the PPP loan application using our preferred method (Smartbiz). The application process only takes about 5 minutes.

Click here to start the application

You’ll land on this page:

It’s a pretty straightforward and easy application. Just upload all the supporting documents the lender asks for to receive the loan funds.

Remember, as an independent contractor or self-employed worker, the entire amount is automatically eligible for forgiveness as owner compensation replacement.


Fill out your name, business name (most likely just your name), email and how much you want to borrow.

After you submit your information, you’ll be directed to this page:

Answer if you received the loans last year or not and if you are applying for the second draw of PPP funds.

Then, you’ll need to answer how long you have been in business.

Afterwards, fill out what industry your business is in and where it is located.  

Then you’ll need to put how many workers you have for your business. This includes freelancers you use to outsource or contract work to.

You’ll be asked to put a password to create an account and save your progress. Once you complete that, you’ll need to put how much ownership of your business you have, your home address, date of birth, and social security number. If you are a freelancer or independent contractor, you’ll simply put 100% and add a “person”.

Then check to see if you “pre-qualify”.

Then, you’ll need to upload your documents we mentioned above and fill out your business information (business entity type, industry, how many employees you have, when your business started).

Select if you will upload a tax document or your CARES act report.

Afterward, you’ll calculate your loan amount and upload your Form 1040 Schedule C since you are an independent contractor. You’ll input line 31 of your Schedule C and the calculator will determine your loan amount.

After you upload your Schedule C, you’ll need to provide supporting documents. Following that, you’ll complete all of your business’ information.

In closing, you’ll need to provide all the proof of your income. The lender will want to see all documents such as wage, commission, income, or net earnings from self-employment income that you made.

Gather your 2019 tax return, Schedule C, bank account information, driver's license or passport, and submit it for review.  

For more information on how to calculate revenue reduction, steps to take to maximize your economic injury disaster loans, and frequently asked questions, check out the Small Business Administration or SBA loan's FAQ page.

Justin W. Jones, EA, JD

Justin W. Jones, EA, JD


Justin is an IRS Enrolled Agent, allowing him to represent taxpayers before the IRS. He loves helping freelancers and small business owners save on taxes. He is also an attorney and works part-time with the Keeper Tax team.

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