Good Changes to the PPP loan forgiveness for Sole Proprietors (no Employees)

On June 17th, the Paycheck Protection Program (PPP) Flexibility Act of 2020 was enacted which made major changes to the provisions for PPP loan forgiveness and the SBA released revised forgiveness applications.Over the next week we will publish articles outlining the changes to the PPP program by business type. (Of course, by the end of the week, Congress may come out with another change to the program and we can do this all over again.. sigh…)

Sole Proprietors with no Employees

  • The biggest change in the PPP Flexibility Act was to increase the loan forgiveness amount for owner compensation to 2.5 months of 2019 net profit (rather than just 8 weeks). So, sole proprietors with no employees can have the full amount of the loan paid off.
  • This forgiveness happens no matter what you do with the money.


Sally is Sole Proprietor with no employees. Her 2019 Schedule C Net Income was $50,000.

Her PPP loan was $50,000/12*2.5 = $10,417

Her loan forgiveness amount is automatically = $10,417.

Her 2020 income and/or what she does with the PPP money does not matter.

Forms to file

  • Your lending institution will likely send you the forgiveness application. Here is a link to the EZ form that the SBA published for loan forgiveness.
  • Since the forgiveness amount for sole proprietor owner compensation is automatic, it is unclear if any forms will need to be filed to request forgiveness.


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