The SBA refers to this as owner income replacement.. 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. We have not reviewed all available products or offers. The grant amount will be based on the businesss annual revenue as documented in its most recent tax return. https://careliefgrant.com/wp-content/uploads/2020/12/FOR-WEBSITE-ONLY-CRG-All-Businesses-Program-and-Application-Guide-Public.pdf. Lets say you have a regular, ongoing sole proprietorshipwith no employees, and your businesshas been in operation for at least a full year. What Types of Homeowners Insurance Policies Are Available? Collateral can include assets such as inventory and equipment as well as intangible assets such as trademarks and copyrights. SBA express loans are a variant of the SBA 7(a) loan that can be approved faster. Since then "crickets", and no $$$ in my bank account. The Act extends the deadline to apply for a PPP loan to May 31, 2021. Payroll costs do not include compensation to agents who are independent contractors. Cash compensation including salary, wages and tips is capped at $100,000 of annualized cash compensation per employee. When can I submit my loan forgiveness certification or application? Step 4: Add the outstanding amount of any Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020 that you seek to refinance, less the amount of any advance under an EIDL COVID-19 loan (because it does not have to be repaid). The CARES II Act created additional targeted EIDL advances for eligible entities located in low-income communities. Copyright 2022 Janover Inc. All rights reserved. Fill out the form below and a member of our team will get in touch with you. Our accounting firm speculates it could be another 3-4 weeks. The deadline for all borrowers to apply for an initial or second draw PPP loan is May 31, 2021. If you have the documentation available when applying for the loan, submitting it when applying will be preferable since it will simplify the forgiveness process once you reach that stage. The interest rate on an EIDL loan is 3.75% APR (fixed) with a 2.75% APR available for nonprofit organizations. It was very helpful.I have applied for both loan. Borrowers with loans under $150,000 who fill out the short-form certification will not need to submit additional documentation to obtain forgiveness. On June 17, 2020, the SBA posted a revised, borrower-friendly Paycheck Protection Program (PPP) loan forgiveness application implementing the PPP Flexibility Act. If the full principal of the PPP loan is forgiven, the borrower is not responsible for the interest accrued. 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. I think my lender allowed my loan amount to be too high. 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. Must be able to provide acceptable form of government-issued photo ID. Its a time for family, friends and creating lasting memories. You cannot request the specific amount of the loan - instead, the SBA determines how much you can borrow using a formula intended to approximate 24 months of your operating expenses. We will provide additional information and guidance if it becomes available. Step 4: Add the outstanding amount of any Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020 that you seek to refinance, less A California law passed on September 9 stated that expenses paid with forgiven PPP loan proceeds cannot be deducted for state income taxes. Repayment plans are available up to 30 years as determined on a case-by-case basis. Copyright 2018 - 2023 The Ascent. Webhttps://crumrealestate.comHere is information to help Independent Contractors get through the Coronavirus epidemic. To verify full-time equivalent employees, you must submit payroll tax filing reported (or that will be reported) to the IRS (typically, Form 941) and state quarterly business and individual employee wage reporting and unemployment insurance tax filings reported (or that will be reported) to the relevant state. According to the Wall Street Journal, it usually takes SBA around one month to process a 7(a) loan. 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. For borrowers with employees, payroll costs include cash compensation paid to employees, employer contributions to employee health insurance, employer contributions to employee retirement plans, and amounts paid by the borrower for employer state and local taxes assessed on employee compensation. This documentation can be submitted: (i) at the time of the loan application; (ii) on or before the date the borrower submits an application for loan forgiveness; or, (iii) if the borrower does not apply for loan forgiveness, at SBAs request. Licensed real estate agents are statutory nonemployees and are treated as self-employed for all Federal tax purposes, including Will I need to pay income tax on the PPP loan proceeds if I use the proceeds for income replacement? Multifamily Loans,Multifamily Today, How do I calculate my maximum PPP loan amount if I am a sole proprietor with employees? You should carefully review the options available to select the SBA loans that will be the best fit for your needs and circumstances. Step 2: Calculate the average monthly gross income or net profit amount (divide the amount from Step 1 by 12). To verify non-payroll costs, you must submit: For mortgage interest payments: Copy of lender amortization schedule and receipts or cancelled checks verifying eligible payments from the covered period. 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. They have not started distributing any money yet, and we have not been informed as to when that might happen. 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. A small business must satisfy the following criteria to be eligible to receive a grant award: Must be a sole proprietor, independent contractor, or registered for-profit business entity (e.g., C-corporation, S-corporation, limited liability company, partnership) that has yearly gross revenue of $2.5 million or less (but at least $1,000 in yearly gross revenue) based on the most recently filed tax return. The maximum EBL loan term is 7 years. What are the eligibility requirements for the program? Any EIDL Advance Amounts previously deducted from a borrowers forgiveness amount will be remitted to the lender, together with interest to the remittance date. 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. Though SBA disaster loans have been available for years, the EIDL was signed into law in March of 2020 as part of the CARES Act, which was passed by Congress to provide emergency relief to American workers and small businesses struggling to survive due to the impact of COVID-19. Multifamily Minute Reader Reflections: When Do You Start the Refi Process? What is an initial Paycheck Protection Program loan, and who qualifies? The SBA has an online guide, which is available here: https://www.sba.gov/funding-programs/disaster-assistance. All of the largest banks (such as JPMorgan Chase and Bank of America) are offering PPP loans. This may help you. Real-estate brokers, are you looking for clarity about what help youre eligible for during the COVID-19 crisis? If someone took the drive-through option literally at your restaurant, you cannot use an EIDL loan to repair the damage. Because of the current application backlog, application approvals are likely to be significantly delayed. However, lenders and borrowers can mutually agree to modify the maturity terms of a PPP loan. Underserved small business groups served by the state-supported network of small business centers (i.e., businesses majority owned and run on a daily basis by women, minorities/persons of color, veterans and businesses located in low-to-moderate income and rural communities). 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. will update this section if the state law changes. It is typically offered at much lower interest rates than 7(a) loans. The Express Bridge Loan (EBL) program authorizes SBA express lenders to provide expedited guaranteed bridge loan financing on an emergency basis for disaster-related purposes to small businesses (including sole proprietors, independent contractors and other self-employed individuals) while those small businesses apply for and await long-term financing. As long as you did not receive a larger PPP loan than you are eligible for, this should not have any impact on loan forgiveness. Commercial Real Estate Loans,SBA7a Loans, However, government officials have stated that the PPP process will be significantly expedited. :), Hello! Tax forms (or equivalent third-party payroll service provider reports for the periods that overlap with the Covered Period. The SBA is stating that PPP loan forgiveness for payroll costs for sole proprietors without employees is limited to: (i) proprietor expenses when calculating your PPP loan using the gross income formula; and (ii) owner income replacement when calculating your PPP loan using the net profit formula. The Covered Period cannot extend beyond September 30, 2021. Do I need to report my receipt of PPP loan proceeds to the EDD if I am receiving PUA or UI benefits? How will this affect forgiveness? Since the definition of payroll costs includes employee salaries, wages paid by an S Corporation will be considered payroll costs that can be covered by PPP loan proceeds. If I received an EIDL advance, will the amount of the advance be deducted from my PPP loan forgiveness? Funds are usually available within 5 to 10 business days of approval. 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. The remainder of the loan that is not forgiven (if any) will operate according to the loan terms described in the Loan Terms section above. Most borrowers with employees will also be able to use the EZ version of the forgiveness application, as long as they did not reduce salaries or hourly wages by more than 25 percent for any individual employee during the Covered Period compared to the period between January 1, 2020 and March 31, 2020; AND as long as one of the following is true: (a) They did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the Covered Period; OR (b) They were unable to operate between February 15, 2020, and the end of the Covered Period at the same level of business activity as before February 15, 2020 due to compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020 related to COVID-19 (or, for a PPP loan made after December 27, 2020, requirements established or guidance issued before the last day of the Covered Period). ", For the Emergency Injury Disaster Loan (EIDL):This loan is very different from the Payroll Protection Plan (PPP) because there are very specific things you can cover with this loan. For a complete FAQ about the California COVID-19 relief grant program, please refer to this page: https://careliefgrant.com/50440-2/. Effective March 25, 2020, SBA expanded the program to apply nationwide. Do I have any other options? What assistance is available for brokers from the SBA? Once your application is completed, a loan officer will review the application, with an approval or decline usually sent within days of the application. Note: For second draw PPP loans, sole proprietors have the option of calculating average monthly payroll costs based on the 1-year period before the date on which the loan is made rather than the 2019 calendar year. At least 60% percent of the PPP loan must be spent on payroll costs in order for the loan to be fully forgiven. C.A.R.s Guidance for Employers regarding the COVID-19 situation provides more information on the FFRCA sick leave tax credits.). 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. There are thousands of banks that already participate in the SBAs lending programs, including numerous community banks. Press question mark to learn the rest of the keyboard shortcuts. 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/. Borrowers with employees may have costs that fall into this category. Many major lenders are currently only assisting borrowers who already have a business checking account with them. If your financial projections are looking grim, it might be worth considering applying for an EIDL loan before the December 21, 2020, deadline arrives. In 2017, over 6 million homes were sold across the United States, and nearly 90% of sellers used a real estate agent to help them through the process. From March 25 to March 31, there will be another application round where businesses that have not yet applied for a grant will be permitted to apply. Yes but borrowers cannot take out an EIDL and a PPP loan for the same purposes. The loan quote represents the amount that youre qualified to borrow, but you can change the amount when you electronically sign the application. To apply for a PPP (Payroll Protection Plan), you must go through an approved SBA loan provider. I need help completing my PPP application. Will employees need to pay taxes on the proceeds that they receive? Required fields are marked *. In addition, all state, local, and municipal government entities are prohibited from applying for an EIDL loan, as are all members of Congress. For annual revenue of $1,000 to $100,000, the available grant amount is $5000. Please refer to the Targeted EIDL Advances section below for more information. will provide updates when we receive more information. The SBA has announced that PPP applications will re-open on Friday, January 15, 2021 for certain small lenders (including community banks and credit unions), and applications will reopen on Tuesday, January 19, 2021 for all lenders. A streamlined online application for EIDL loans has been made available by SBA at the following link: https://covid19relief.sba.gov/. For a complete FAQ about the California COVID-19 relief grant program, please refer to this page: 2021Copyright CALIFORNIA ASSOCIATION OF REALTORS. This means that you can use the proceeds of the PPP loan to pay your employees, but not any of your agents who are independent contractors. Chris and Gary, For additional information on the COVID-19 EIDL loan program, visit Tafts COVID-19 Toolkit for articles provided by Tafts SBA Task Force. If you're using thewrong credit or debit card, it could be costing you serious money. The SBA is launching a new round of economic injury disaster loan (EIDL) Advances called Targeted EIDL Advance which provides eligible businesses with A Bellingham-based real estate brokerage faces accusations that it knew two of its male agents drugged and sexually assaulted female co-workers during work events.. Apply for a loan in minutes and get multiple quotes today. C.A.R. Entities eligible for a supplemental targeted advance will be able to receive an additional $5,000 grant.