If your loan was too high (for example, if you received more than $20,833 despite not having any employees), then it might not be possible to obtain full forgiveness. C.A.R.s Guidance for Employers regarding the COVID-19 situation provides more information on the FFRCA sick leave tax credits.). If you have additional expenses that will not be forgiven if spent with PPP loan proceeds, an Economic Injury Disaster Loan (EIDL) may be a good option. Real estate brokers: Can you qualify for a PPP loan? And But what if we told you that the, The Commission Calculator is Available NowWe love the holidays at the Paperless Agent. There is currently no official guidance from the EDD as to whether PPP loan proceeds need to be reported as income when you are certifying for PUA or UI. CARES Act II expressly prohibits lenders from requiring any documentation to be submitted by the borrower to obtain forgiveness for loans under $150,000 beyond the items above. C.A.R. Many EIDL Loans Will Cause Disaster For Unassuming Independent contractors who have been adversely impacted by the COVID-19 emergency are eligible. 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. If a member doesnt report loan proceeds and they are eventually determined to be reportable income, EDD may seek to recover amounts paid plus penalties. The proprietor expenses or owner income replacement portion of the PPP loan can be spent by the borrower on anything, at any time. For businesses established after the third quarter of 2019, the SBA compares revenue from any 2020 quarter to the fourth quarter of 2019. You should carefully review the options available to select the SBA loans that will be the best fit for your needs and circumstances. The EIDL has a 30-year repayment plan, and there is no prepayment penalty if you decide to pay early. Consult with your accountant if you need assistance determining your gross receipts, and/or refer to SBAs FAQ document available, Once received, the loans may be used by brokers for payroll costs (including paid sick leave), employee salaries, insurance premiums (including health, group life, vision, and dental insurance premiums), rent expenses, mortgage expenses, utility expenses, PPE expenses, operations expenses, property damage costs, supplier costs, and other debt obligations. If you are considering a FinTech lender, you will want to determine if the FinTech company is actually submitting applications to a bank or to the SBA, not just collecting your contact information for marketing purposes. From March 5 to March 11, grants will be awarded to waitlisted businesses that applied during the previous application rounds, but new applications will not be accepted during this round. eidl for real estate agents 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/. SBA will reach out directly via email and provide more details about how businesses can request an increase close to the April 6 implementation date. For more information on SBA 7(a) loans, please visit https://www.sba7a.loans/sba-7a-loans-small-business-blog/how-do-commercial-real-estate-loans-work. Proceeds must be used for purposes approved by the SBA, which include: Improvements to property such as utilities, parking lots, street enhancements, and landscaping, Constructing new facilities or modernizing/renovating existing facilities, Buying machinery and equipment for long-term use. You will choose the length of the Covered Period for your loan when you fill out the PPP loan forgiveness certification or application. Once approved, money is usually transferred to your bank account, using the banking information that you provided in the application. Co-Leader of COVID-19 Loan Fraud Ring Extradited from The Covered Period cannot extend beyond September 30, 2021. 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. Standard SBA Loans are not available for passive income (except Hotels and Self Additionally, there is no requirement that a borrower must pay themselves in equal weekly installments to obtain loan forgiveness. You can borrow up to $25,000, which can be used for disaster-related purposes to support the survival and/or reopening of your business. Demonstrate at least a 25 percent reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same 2019 quarter. We will continue to update this FAQ as any rules or other guidance are provided. If you operate as a sole proprietor, you can use the PPP loan proceeds as a substitute for the compensation you would normally receive from commissions. To identify which program(s) youre eligible for, work with your lawyer and an accountant like Wipfli. A California law passed on September 9 stated that expenses paid with forgiven PPP loan proceeds cannot be deducted for state income taxes. Effective March 25, 2020, SBA expanded the program to apply nationwide. 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. Eligible rent costs include payments for rent obligations on real or personal property under a leasing agreement in force before February 15, 2020. Press question mark to learn the rest of the keyboard shortcuts. Pursuant to the COVID relief package that passed on December 27, 2020 (known as CARES II Act), borrowers that have previously received a PPP loan will now be allowed to take out a second PPP loan. Using line 7 gross income will usually lead to a higher loan calculation, so it will be preferred for most sole proprietors. While taking out any loan requires serious consideration, an EIDL loan offers good repayment terms, a low interest rate, and an easy application process. At least 60% percent of the PPP loan must be spent on payroll costs in order for the loan to be fully forgiven. We have developed a library of resources in our COVID-19 resource center to help you stabilize today and prepare for tomorrow. If youre an independent contractor, you may be under the impression that the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program dont apply to you. Consult with your accountant if you need assistance determining your gross receipts, and/or refer to SBAs FAQ document available here. After that, PPP loans are 75% guaranteed for loans exceeding $150,000 and 85% guaranteed for loans equal to or less than $150,000. Borrowers with employees may have costs that fall into this category. For additional information on the COVID-19 EIDL loan program, visit Tafts COVID-19 Toolkit for articles provided by Tafts SBA Task Force. The application date is May 2, 2020. It can be used for working capital, equipment, and owner-occupied commercial real estate. The following are the ineligible uses of grant funds: Human resource expenses for the State share of Medicaid, Personal expenses or other expenses unrelated to COVID-19 impacts, Expenses for repairs from damages already covered by insurance, Reimbursement to donors for donated items or services. ** C.A.R. Thus, if your Schedule C gross income or net profit amount is $100,000 or greater, you qualify for the maximum loan available to a sole proprietor without employees, which is $20,833.33. An EIDL can help small business owners weather the COVID-19 storm. If the first disbursement is not made within 90 days from receipt of an SBA loan number, the EBL loan will be canceled. You should consult with your tax advisor to see how PPP loan forgiveness may affect you and your business. Construction and Real Estate, The SBA refers to this as owner income replacement.. Must be an active business operating since at least June 1, 2019. A government guarantee reduces the risk to the borrower. The eligibility requirements for a second draw PPP loan are different than the requirements for an initial PPP loan. HUD 223f Loan,HUD 223a7 Loan, Lets say you have a regular, ongoing sole proprietorshipwith no employees, and your businesshas been in operation for at least a full year. Reddit and its partners use cookies and similar technologies to provide you with a better experience. Like any loan, there are disadvantages to obtaining an EIDL loan, so its up to you to determine whether the advantages outweigh the disadvantages. These loans are offered in amounts of up to $350,000. The grant amount will be based on the businesss annual revenue as documented in its most recent tax return. Its also important to understand that if you do pledge collateral, youre placing a lot of temporary restrictions on your business including the stipulation that while your loan is still outstanding, you cannot sell, lease, or transfer any collateral that was used as a loan guarantee without the approval of the SBA. Any forgiven PPP loan proceeds do not need to be reported as gross income by the borrower for federal and state income taxes. For businesses established after the fourth quarter of 2019, the SBA compares your second or third quarter of 2020 revenue to revenue from the first quarter of 2020. Economic Injury Disaster Loans (EIDLs) are targeted, low-interest loans to small businesses that have been severely impacted by the coronavirus. This will determine loan amount! You must also provide a 2020 invoice, bank statement, or book of record to establish you were in operation on or around February 15, 2020. The CARES Act has created the Paycheck Protection Program (PPP), an expansion of SBAs 7(a) loan program for providing financial assistance to small businesses. SBA Loans for Brokers | Coronavirus All According to the New York Times, it typically takes one to two weeks for the SBA to make a decision on an application, and up to a week after that for the full loan check to be disbursed. The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters. What is an SBA Express Bridge Loan, and who qualifies? You could, if desired, get a PPP loan to cover payroll costs (defined below) and other costs that are forgivable under the PPP, and then get an EIDL loan to cover some of your other expenses. 2054 0 obj <>/Filter/FlateDecode/ID[<8C8FAFB2856FD243BB76F15BC6E77F5A>]/Index[2030 41]/Info 2029 0 R/Length 108/Prev 228727/Root 2031 0 R/Size 2071/Type/XRef/W[1 2 1]>>stream Click here for our Advertiser Disclosure. real estate agents Please be advised that you are not required to seek services from any of the companies suggested. None of the information on this site constitutes legal advice. What happens if any portion of my PPP loan is not forgiven? WebGo to EIDL r/EIDL Posted by Clear-Translator-886. Must not use proceeds for any of the following: Funding for other debts (refinancing, consolidating, or repaying). Payroll costs also do not include: Compensation of an individual employee in excess of an annual salary of $100,000; employer-side payroll taxes, railroad retirement taxes, and income taxes; any compensation of an employee whose principal place of residence is outside of the US; and qualified sick or family leave wages for which a credit is allowed under the Families First Coronavirus Response Act. Press J to jump to the feed. All states require real estate agents to be licensed by the state to engage in the sale of real estate. Expanding a real estate brokerage: If you need to hire new employees or expand your marketing efforts, SBA 7(a) loans are a great choice.