Press question mark to learn the rest of the keyboard shortcuts. No, payroll costs do not include compensation to agents who are independent contractors. On June 17, 2020, the SBA posted a revised, borrower-friendly Paycheck Protection Program (PPP) loan forgiveness application implementing the PPP Flexibility Act. WebAs of September 8, 2021, new COVID-19 EIDL policy changes took effect as follows: Maximum loan cap increased from $500,000 to $2 million. SBA Covid-19 EIDL Loan Collateral and Personal Requirements SBA Covid-19 EIDL Loan Collateral and Personal Guarantee Requirements Address: 1016 E Osceola Parkway, Kissimmee, 34744, Florida, United States Phone: 407-502-2400 E-mail: info@freedomtaxfl.com Freedom Immigration Freedom Insurance & Financial WebComplimentary Self-Defense Class for Real Estate Agents happening at David Hoffman Realty, 10715 Sikes Place, Charlotte, United States on Tue Mar 07 2023 at 10:00 am to 12:00 pm. Must be able to provide organizing documents including 2018 or 2019 tax returns or Form 990s, copy of official filing with the California Secretary of State, if applicable, or local municipality for the business such as one of the following: Articles of Incorporation, Certificate of Organization, Fictitious Name of Registration or Government-Issued Business License. How will this affect forgiveness? Good morning! As of April 24, 2020, an additional $50 billion was allocated to EIDLs and an additional $10 billion was allocated for EIDL grants. PPP applications already reopened the week of January 11 for community development financial institutions. By rejecting non-essential cookies, Reddit may still use certain cookies to ensure the proper functionality of our platform. Any forgiven PPP loan proceeds do not need to be reported as gross income by the borrower for federal and state income taxes. In comparison, microloans are loans designed for smaller, startup businesses, and are offered in amounts of up to $50,000. As an Ebby Halliday client, youll benefit from knowledgeable, respected agents and a team of trusted professionals dedicated to making buying or selling your Like any loan, there are disadvantages to obtaining an EIDL loan, so its up to you to determine whether the advantages outweigh the disadvantages. If you think that an EIDL loan may be right for your business, your first step should be to make sure that your business qualifies for a loan. Once your application is completed, a loan officer will review the application, with an approval or decline usually sent within days of the application. Because the cap limit is $100,000, if your net profit is over that, you have to reduce it to $100,000. We are a technology company that uses software and experience to bring lenders and borrowers together. HUD 232 Loan, SBA express lenders are only allowed to make EBL loans to eligible borrowers with which the lender had an existing banking relationship on or before the date of the applicable disaster. 1. Can I receive a targeted EIDL advance if I have not yet applied for an EIDL? Before you agree to a loan, be sure that you are aware of and understand EIDL loan terms and requirements adequately. The following are the eligible uses of grant funds: All employee expenses including payroll costs, health care benefits, paid sick, medical, or family leave, and insurance premiums; Working capital, overhead (including rent, utilities, mortgage principal and interest payments (excluding mortgage prepayments)), debt payments (principal and interest) incurred before March 1, 2020; Costs associated with re-opening business operations after being fully or partially closed due to state-mandated COVID-19 health and safety restrictions and business closures; Costs associated with complying with COVID-19 federal, state or local guidelines for reopening with required safety protocols, including but not limited to equipment, plexiglass barriers, outdoor dining, PPE supplies, testing, and employee training expenses; or. No. PPP loans are offered on highly favorable terms for borrowers: They are forgivable, they are guaranteed by the government, and payments are deferred. Substantial economic injury means the business is unable to meet its obligations and pay its ordinary and necessary operating expenses. How do I calculate my maximum PPP loan amount if I am a sole proprietor with employees? And because the SBA requires you to save the receipts of any purchases made with EIDL loan monies, you must track these purchases properly. If youre an independent contractor, you may be Funds are usually available within 5 to 10 business days of approval. C.A.R. Any other COVID-19 related expenses not already covered through grants, forgivable loans or other relief through federal, state, county or city programs. The EIDL has a 30-year repayment plan, and there is no prepayment penalty if you decide to pay early. The CARES II Act created additional targeted EIDL advances for eligible entities located in low-income communities. In addition to revising the. Information is available at careliefgrant.com in addition to the information in this FAQ. Eligible costs are only those costs incurred due to the COVID-19 pandemic and the health and safety restrictions such as business interruptions or business closures incurred as a result of the COVID-19 pandemic. Your lender may have additional instructions for submitting the PPP loan forgiveness certification. HUD 223f Loan,HUD 223a7 Loan, Best Homeowners Insurance for New Construction, How to Get Discounts on Homeowners Insurance. Borrowers have until December 31, 2020 (or, for PPP loans made after December 27, 2020, the last day of the Covered Period) to restore their workforce levels and wages to the pre-pandemic levels required for full forgiveness. You should consult with your tax advisor to see how PPP loan forgiveness may affect you and your business. Question: I filed an application with the SBA for the EIDL Advance over a week ago, and received a Confirmation Number stating I would receive an update at the e-mail address I registered with. SBA 504 loans are intended for the purchase and construction of owner-occupied commercial real estate, not working capital, and are typically offered at much lower interest rates than 7(a) loans. Some PPP funding has been set aside for community banks, credit unions, and community development financial institutions. Additionally, realtors can use the loan to help small businesses find the funding they need to purchase commercial real estate in the first place. Loan forgiveness means that you are not required to repay your loan. SBA 7(a) Loans is a All states require real estate agents to be licensed by the state to engage in the sale of real estate. The two most common loan programs are the SBA 7(a) loan and the SBA 504 loan. Paypal https://www.loanbuilder.com/ppp-loan-support, Kabbage https://www.kabbage.com/paycheck-protection-program-loans/, Divvy https://getdivvy.com/covid-19/sba-ppp-loans/assistance/, Credibly - https://sba.credibly.com/apply-online/?utm_medium__c=cpc&utm_source__c=google&utm_campaign__c=11-seg-brd-des&utm_term__c=11_bmm_credibly&utm_content__c=easy_responsive, Lend IO / Paychex https://www.lendio.com/, Biz2Credit.com / Paychex (may be requiring 2 or more employees) - https://www.biz2credit.com/disaster-support/cares-act-loans-coronavirus, Union Bank - https://unionbank.avoka-transact.com/workspace/servlet/SmartForm.html?formCode=ppp-loan, Square Capital - https://squareup.com/us/en/l/sba-ppp-loans, Intuit Quickbooks - https://quickbooks.intuit.com/small-business/coronavirus/paycheck-protection-program/, ReadyCapital - https://ppp.readycapital.com/. Read more: PPP eligibility and how small businesses can use the funds. Effective March 25, 2020, SBA expanded the program to apply nationwide. The lender is responsible for notifying the borrower of the forgiveness amount after the SBA makes its decision. In order to receive a second draw PPP loan, a borrower must: Employ not more than 300 employees. If this amount is zero or less, you are not eligible for a PPP loan. or its members any referral fee or any other thing of value for being on this list. SBA 7(a) loans for working capital and equipment have terms of up to 10 years, while SBA 7(a) loans for commercial real estate loans have terms of up to 25 years. No; however, emergency grant portion does not need to be repaid, $500,000; eligible borrowers can ask for "targeted" emergency grant of up to $15,000, Working capital purposes, including payment of fixed debts, payroll, and accounts payable, "Disaster-related purposes" to support the survival and/or reopening of the small business. No contract, cancel at any time. Use r/TargetedEIDL for advance/grant issues. The only portion of the loan that was able to be forgiven was the advance, which is no longer available. For example, if youre looking to change your business structure from a sole proprietorship to an S corporation, you will first need the approval of the SBA. If the eligible entity has previously applied for EIDL assistance on or before December 27, 2020 but has not yet received an EIDL advance, the entity will be eligible to receive a grant of $10,000. WebCOVID EIDL Loans Information as of September 8, 2021 Contents Introduction Section 1: COVID EIDL Program Information Section 2: Submitting a New COVID EIDL Application (NOTE: This paragraph does not apply if your loan was under $150,000 and are eligible to fill out the short-form certification.). For businesses established after the second quarter of 2019, the SBA compares revenue from any 2020 quarter to revenue from the third or fourth quarter of 2019. Do I need to submit any additional supporting documentation with my loan forgiveness application? Businesses with fewer than 500 employees including sole proprietors, independent contractors, and other self-employed individuals all qualify for initial PPP loans. However, keep in mind that all loan proceeds for borrowers without employees can be attributed as proprietor expenses or owner income replacement, and there is no need for these borrowers to attribute any of the loan proceeds to the non-payroll costs category. If you are applying for a second draw PPP loan, the best option may be to work with the lender that provided you with the initial PPP loan. These lenders will be handling the PPP application process. Government guarantee of a loan means that the government assumes the debt obligation for the loan if the borrower defaults. This is because 7(a) loans can be are incredibly flexible, and can used for working capital, equipment, and owner-occupied commercial real estate. A borrower may request that the SBA review the lenders decision regarding forgiveness of the loan in the event that the lender determines that the borrower is not eligible for forgiveness. Generally, receipts are considered total income (or in the case of a sole proprietorship, independent contractor, or self-employed individual gross income) plus cost of goods sold, and excludes net capital gains or losses as these terms are defined and reported on IRS tax return forms. Payment deferment means that you are not required to immediately begin making payments to the lender. WebOne Experience. %PDF-1.6 % Entities eligible for a supplemental targeted advance will be able to receive an additional $5,000 grant. It was very helpful.I have applied for both loan. Eligible rent costs include payments for rent obligations on real or personal property under a leasing agreement in force before February 15, 2020. "Payroll costs" include net profit of independent contractors. The actual loan size borrowers receive will be determined by a formula based on average total monthly payroll costs over a one-year period. Image source: Author. The SBA has released the sample application forms for first and second draw PPP loans: First draw PPP loan borrower application form, First draw PPP loan application for Schedule C Filers Using Gross Income, Second draw PPP loan borrower application form, Second draw PPP loan application for Schedule C Filers Using Gross Income. However, government officials have stated that the PPP process will be significantly expedited. Additionally, there is no requirement that a borrower must pay themselves in equal weekly installments to obtain loan forgiveness. Right now, there are over 2 million Americans with active real estate licenses, and over 1.3 million members of the National Association of Realtors, Apply for a loan in minutes and get multiple quotes today Additionally, the American Rescue Plan created a new supplemental targeted advance program. There are strict guidelines about what you can and cannot use EIDL loans for. Because of the current application backlog, application approvals are likely to be significantly delayed. For second draw PPP loans of not more than $150,000, borrowers must submit documentation sufficient to establish that they experienced a reduction in revenue. For supplier costs: Copy of contracts, orders, or purchase orders in effect at any time before the Covered Period (except for perishable goods), copy o invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments. If you are considering applying for a PPP loan with one of these smaller lenders, here are some resources to locate a lender in your area. There are 2 programs, that we can take advantage of as real estate agents, that allow us to continue to operate despite what's going on: Because of the new legislation, independent contractors and sole proprietors now qualify to take advantage of these programs! Step 2: Calculate the average monthly amount (divide the amount from Step 1 by 12). Thank you SIC code 6531 isnt even right for my biz but thats what NAV shows so I guess thats what they will use. The CARES Act II signed on December 27 creates a simplified loan forgiveness application process for loans under $150,000. %%EOF PPP loan proceeds, EIDL advances, and direct payments from the IRS (e.g., tax refunds, rebates, stimulus or economic impact payments pursuant to the CARES Act) should not be included in gross receipts. Many major lenders are currently only assisting borrowers who already have a business checking account with them. Legislation and regulation What are the eligibility requirements for a targeted EIDL advance? This website does not endorse or charge you for any service or product. hello@sba7a.loans, SBA Loan ComparisonSBA 7(a) Loan Fees, Rates, and TermsQualifying for an SBA 7(a) LoanSBA Loan Guides per State, Privacy PolicyTerms of UseAdvertiser Disclosure. For sole proprietors without employees, proprietor expenses or owner income replacement can encompass the entire principal of the loan, so no additional supporting documentation will need to be submitted to obtain forgiveness. Applications for the program must be submitted through a Community Development Financial Institution (CDFI) that has partnered with the state of California to distribute the funds. But the funds that were set aside to cover the advance were quickly depleted, with the SBA discontinuing the advances in July of 2020. If a Schedule C filer elects to use gross income to calculate its loan amount on a First Draw PPP Loan, and the borrower reported more than $150,000 in gross income on the Schedule C that was used to calculate the borrowers loan amount, the borrower will not automatically be deemed to have made the statutorily required certification concerning the necessity of the loan request in good faith, and the borrower may be subject to a review by SBA of its certification. All independent contractors and sole proprietors without employees will be able to use this short certification form, since their loans were capped at $20,833. After that, PPP loans are 75% guaranteed for loans exceeding $150,000 and 85% guaranteed for loans equal to or less than $150,000. In response to the COVID-19 pandemic, the CARES Act established eligibility for two SBA loan programs: Section 7(a) Payroll Protection Program loans (PPP) and They are currently available to small businesses with fewer than 500 employees, including sole proprietors, independent contractors and other self-employed individuals. Press J to jump to the feed. Remaining portions of the EIDL, for purposes other than those laid out as eligible for loan forgiveness under the PPP, will remain a non-forgivable loan. The following non-payroll costs are forgivable: Eligible mortgage interest costs include payments for any indebtedness or debt instrument incurred in the ordinary course of business that is a liability of the borrower, is a mortgage on real or personal property, and was incurred before February 15, 2020 (but not any prepayment or payment of principal). If this amount is over $100,000, reduce it to $100,000. Im a sole proprietor whose gross income was more than $150,000 in 2019 or 2020. (Note: The cap is based on 8 weeks worth or $15,385, whichever is less, for an 8-week Covered Period.). According to court documents, Dadyan was a member of a Los Angeles-based fraud ring that schemed to fraudulently obtain more than $20 million in Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) COVID-19 relief funds. This means that a borrower that chooses to file before the end of the Covered Period cannot contact the lender at a later date to mitigate any salary reductions after the loan forgiveness application has been filed. The Economic Injury Disaster Loan or EIDL is designed for businesses with fewer than 500 employees. Complimentary Self-Defense Class for Real Estate Agents. As real estate agents, we are exactly who these legislations were designed to help. Community Banks, Credit Unions and Community Development Financial Institutions**, Search for community banks based on your Zip Code: https://www.icba.org/about/find-a-community-bank, List of credit unions in California: https://www.creditunionsonline.com/california-credit-unions.html, List of community development financial institutions (Excel spreadsheet that you can sort to list California institutions): https://www.cdfifund.gov/Documents/CDFI%20Cert%20List%2004-14-2020%20Final.xlsx, List of 2019 Top 100 U.S Small Business Administration (SBA) Lenders: https://www.sbalenders.com/most-active-sba-banks-in-2019-mid-year-review/, SmartAsset.com evaluation of PPP lenders: https://smartasset.com/insights/ppp-loan-lenders.