The answer is Yes. This is because registering and doing business under a DBA name is not the same as forming a business or a business entity, so a DBA can apply for PPP without hitches or impediments as long as is the same business name used on your PPP application and matches your tax returns.

Even if you register a DBA without first forming as an LLC, corporation, or some other legal entity type, the state you’re doing business in recognizes your business as a sole proprietorship. And as a sole proprietor, you can legally conduct business in that state under your fictitious business name, but you won’t have any limited liability protection.

What is a PPP?

The Paycheck Protection Program (PPP) is the chief provision in the CARES Act. To date, it has provided over $500 billion in forgivable loans for small businesses impacted by Covid-19. PPP partners with small businesses to pay their employees of up to eight weeks of payroll.

Therefore, the loan is designed to provide small businesses with the necessary resources to maintain payroll, cover overhead costs, and hire back employees who have been laid off. The entire program will authorize up to $349 billion in relief.

What Kind of Businesses are Eligible for PPP Loans?

Although most active small businesses are eligible to apply for PPP loans, the loan application will ask you a few additional questions that will determine whether or not you can receive the funds. Whether you use a DBA or not, if your business started operations before February 15, 2022, then you qualify for the loan. Sole proprietors can even apply for 2.5 times their average monthly payroll costs.

If your business has no more than 500 W-2 employees, then you are likely eligible for PPP loans, DBA or not. If you have more than 500, it’s up in the air. Some industries are eligible, and some aren’t. If you have more than 500 employees, it is advisable you use the Small Business Administration’s size standards tool to find out whether you’re eligible.

Also, if your DBA have borrowed money from the government before but had trouble repaying these loans, then you probably won’t be approved. Also have it in mind that applicants with criminal charges or convictions in the last five years might not be eligible.

The PPP loan application is administered online via eligible lenders and you can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating.

Additionally, other regulated lenders will be available to make these loans once they are approved and enrolled in the program. However, it is pertinent you consult with your local lender as to whether it is participating in the program. To apply, complete and submit the Paycheck Protection Program loan application to an eligible lender with required documentation.

8 Crucial Documents You Will Need to Apply For PPP Loans

Although PPP applications are no longer being accepted, legislation is pending that could reopen the program. Also since the PPP promised a streamlined, low-documentation process, some business owners may still face confusion over what they need to provide their prospective lender. Nonetheless, here is a list of possible required documents to have at your fingertips.

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, 5, or 6, you do not qualify for a PPP loan. If you answer yes to question 3 or 4, you may still qualify, but you are expected to include an Addendum on a separate sheet explaining the details.

2. Average monthly payroll costs

(Only applies to businesses with employees). Here is what may count 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 are expected to “show their work” on how they calculated the requested loan amount, and retain the supporting documentation used to get to that figure.

3. Previous Year Proof of Payroll Costs (or Self Income)

  • If you have employees (even as a partnership), you are expected to provide one of these documents: IRS Form 940 for 2019, IRS Form 941 for 2019 (Please note this is a quarterly form, so you are expected to 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, and Payroll processor records from a PEO (Professional Employer Organization)
  • If you are a partnership without employees, you are expected to provide: 2019 Schedule K-1 (IRS Form 1065).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 are expected to 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 are expected to 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 are expected to list the percentage of all owners).

  • For corporations (with employees) and partnerships

2019 Schedule K-1 (IRS Form 1065). 2018 Schedule K-1 (IRS Form 1065) may also be acceptable if the main 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 are expected to show % of ownership to be acceptable.

  • For Sole Proprietors and Independent Contractor

2019 IRS Form 1040 Schedule C that shows business name and owner name, or2018 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 is expected to 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

This is so the lender can deposit approved funds into your account, you may be required to provide a bank statement (either an electronic [pdf] or scanned copy) showing both the name on the account and the account number. Some lenders may accept a voided check. 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 statements are expected to be in the business name.

8. Proof of Business Operation and Active Status with Secretary of State (SOS)

To verify that your business is Active and in Good Standing, you are expected 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. This is expected to be current for the month you apply for the PPP loan.


DBA or not, most active small businesses are eligible to apply for PPP loans. However, the coronavirus pandemic and Paycheck Protection Program (PPP) have caused details to change at a rapid pace. Additional guidance from the government may change or clarify certain aspects of the loan process and could result in changes to the information provided above. Nonetheless, it is always imperative to consult with professionals who can better address your specific concern and situation.

Frequently Asked Questions

  1. What Is The Interest Rate On A PPP Loan?

PPP loans have an interest rate of 1%. Loans issued prior to June 5, 2020, have a maturity of two years. Loans issued after June 5, 2020, have a maturity of five years.

  1. How Do You Apply For Forgiveness On PPP Loan?

Application for loan forgiveness is processed by your lender. You need to fill out a PPP loan forgiveness application form and submit it to your lender. To apply for PPP loan forgiveness, use the SBA’s Loan Forgiveness Application form, Form 3508, or your lender’s equivalent form.

You might be able to use Form 3508EZ or Form 3508S if you meet the eligibility guidelines. After you submit your application for forgiveness, your lender is required by law to provide you with a response within 60 days.

  1. What Will Be The Maturity Date On A PPP Loan?

If a PPP loan received an SBA loan number on or after June 5, 2020, the loan has a five-year maturity. If a PPP loan received an SBA loan number before June 5, 2020, the loan has a two-year maturity, unless the borrower and lender mutually agree to extend the term of the loan to five years. The promissory note for the PPP loan will state the term of the loan.

  1. What Happens If PPP Loan Funds Are Misused?

If the borrower uses PPP funds for unauthorized purposes, SBA will direct the borrower to repay those amounts. If the borrower knowingly uses the funds for unauthorized purposes, he will be subject to additional liability such as charges for fraud.

  1. How Much Can Your Loan Forgiveness Be Reduced By?

Loan forgiveness may be reduced if the average wages for employees during the covered period decreases by more than 25% compared to the 1st quarter of 2020. If the employee’s pay over the 24 weeks is less than 75% of the pay they received during the most recent quarter, the eligible amount for forgiveness will be reduced by the difference between their current pay and 75% of the original pay. To determine if wages has decreased by more than 25%:

  • Calculate the average salary for salaried employees or average hourly wage for hourly employees during the covered period. (Covered Period)
  • Do the same calculation for January 1 through March 31. (Lookback Period)
  • Divide the covered period by the lookback period.
  • If the result is 0.75 or greater, then the employee will not affect your forgiveness amount.
  • If the result is less than 0.75, multiply the lookback period value by 0.75 and subtract the covered period value.
  • Total results for all employees that have salary or hourly wages decreased by greater than 25%
  • Enter zero if there were no reductions in excess of 25%.
  1. How Much Can You Borrow?

The maximum amount of money you can borrow as a first-time PPP borrower is 2.5 times your average monthly payroll costs, up to a maximum of $10 million. That means, for example, if your average monthly payroll in the last 12 months was $100,000, you could borrow up to $250,000.

  1. How Much Will You Pay As Your Down Payment?

The typical down payment requirement for a loan is 10% to 20%.

  1. How Much of Your Loan Can Be Forgiven?

The amount of loan forgiveness can be up to the full principal amount of the loan and any accrued interest. An eligible borrower will not be responsible for any loan payment if the borrower uses all of the loan proceeds for forgivable purposes.

However, to receive full loan forgiveness, a borrower must use at least 60% of the PPP loan for payroll costs, and not more than 40% of the loan forgiveness amount may be attributable to non payroll costs. If you used $0 of your PPP loan funds on payroll, you are not eligible for any forgiveness.

  1. How Can Small Businesses Use PPP Loans?

The proceeds from your PPP loan may be used for limited purposes. The bulk of your PPP loan proceeds (at least 60%) should go towards payroll costs, which have been identified as:

  • Salaries, wages, commissions (capped at $100,000 per employee)
  • Cash tips or the equivalent (based either on employee records or based on employer good faith estimates)
  • Vacation, parental, family, medical, or sick leave payments (unless covered under another program)
  • Separation or dismissal allowances
  • Employee benefits including Group health care coverage insurance premiums and Retirement fund payments
  • Payments for state and local taxes assessed on employee compensation
  1. What Documents Do You Need For Your Pay check Protection Program Loan Application?
  • Completed PPP application form
  • Proof of payroll or income
  • Unexpired, government-issued driver’s license or passport (for all owners over 20%)
  • Voided check
  • Documents needed for proof of 25% revenue reduction (for a second draw PPP)
  1. Can You Afford A Small Business Loan?

When wondering whether you can afford a small business loan, you should ask yourself:

  • Do I have a debt service coverage ratio of 1.25 or higher?
  • Do I have a debt-to-income ratio of 36% or lower?
  • Do I have collateral or can I confidently sign a personal guarantee?
  • Will the loan lead to a good return on investment?

If you have answered yes to all of these questions, odds are your business is in a healthy financial spot to take on a new small business loan.

  1. What Time Period Should Borrowers Use For The Payroll Calculation?

In general, borrowers can calculate their aggregate payroll costs using data from the previous 12 months. Seasonal businesses must use the average number of employees per pay period during the 12-calendar week period the borrower used to calculate its payroll costs.

  1. When Do You Need To Start Paying Interest On Your Loan?

All PPP loans carry an interest rate of 1.0%. It’s important to remember that interest accrues from the date of loan disbursement and is not forgivable. The maturity of a PPP loan depends upon the disbursement date.

  1. What Other Documents Will You Need To Include In Your PPP Application?
  • Official PPP Loan Application Form
  • Payroll Documentation
  • Revenue Reduction Documentation
  • ID Verification
  1. Do Independent Contractors Count As Employees For Purposes Of PPP Loan Calculations?

No, independent contractors have the ability to apply for a PPP loan on their own so they do not count for purposes of a borrower’s PPP loan calculation.

  1. If You Have A Small Side Business That Has Not Been Registered With The State, Can You Apply For The EIDL Loan?

No, to be eligible for EIDL assistance, small businesses or private non-profit organizations must have sustained economic injury and be located in a disaster declared county or contiguous county and fully registered.

  1. How Quickly Can You Receive Funding?

Once approved, the SBA requires lenders to disburse funds within 10 calendar days. Your loan is considered approved once the SBA assigns you a loan number. In general, the PPP loan funding timeline is around two weeks, from when you submit your application to the time the lender disburses funds.