Author Topic: SBA PPP and EIDL Small Business Loans (some money is forgivable)  (Read 535833 times)

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1700 on: June 17, 2020, 02:28:45 PM »
100k salary, certain benefits might not have been included in the 100k and this may have varied by lender.

So based on this, SE will automatically receive 100% forgiveness as payroll if they choose a 24-week cover period.
No need to rely on rent and utilities and worry if they were or weren't included in Schedule C.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1701 on: June 17, 2020, 02:31:56 PM »
Anyone with details about how EIDL is calculated?
Someone with 1.6M gross revenue 800K cogs, only received 40k loan

Offline Ygold

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1702 on: June 17, 2020, 07:33:26 PM »
I think I need a PPP/EIDL for dummies. Can't wrap my head around this.

1. Would it be better for a SE to go for a PPP or EIDL, or is there ultimately no difference?

2. Let's say for example you made 50k on your schedule C. Your PPP Loan will be $10,416. Now how does the loan forgiveness work? You have no mortgage/utilites etc; for this business, so the most you can claim is 8 weeks of your past years salary for payroll, which will be $8,333?

3. Is there any qualification needed to claim forgiveness?  if your bringing home the same salary as last year, does that mean you just netted an additional $8,333?
Shout out to Meshugener!

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1703 on: June 17, 2020, 07:41:29 PM »
I think I need a PPP/EIDL for dummies. Can't wrap my head around this.

1. Would it be better for a SE to go for a PPP or EIDL, or is there ultimately no difference?

2. Let's say for example you made 50k on your schedule C. Your PPP Loan will be $10,416. Now how does the loan forgiveness work? You have no mortgage/utilites etc; for this business, so the most you can claim is 8 weeks of your past years salary for payroll, which will be $8,333?

3. Is there any qualification needed to claim forgiveness?  if your bringing home the same salary as last year, does that mean you just netted an additional $8,333?

1) EIDL is a straight up loan- no forgiveness. PPP can be fully forgiven if rules are followed.

2) With the new rules if you choose a 24-week covered period you get 100% forgiven as owner compensation. No need for other expenses.

3) No qualifications.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1704 on: June 17, 2020, 07:43:48 PM »
1) EIDL is a straight up loan- no forgiveness. PPP can be fully forgiven if rules are followed.

2) With the new rules if you choose a 24-week covered period you get 100% forgiven as owner compensation. No need for other expenses.

3) No qualifications.
http://chaiplus1.com/news/cares-act-small-businesses/

Offline Ygold

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1705 on: June 17, 2020, 07:51:26 PM »
1) EIDL is a straight up loan- no forgiveness. PPP can be fully forgiven if rules are followed.

2) With the new rules if you choose a 24-week covered period you get 100% forgiven as owner compensation. No need for other expenses.

3) No qualifications.

1. So there is no reason for an SE to take an EIDL (grant) as essentially the PPP ends up being a grant as well, correct?

2. When do you choose the covered period? On the loan docs?

3. How does a SE with no employees prove he used it 100% on "payroll? Just his word?
Does that mean, in the above scenario, the SE individual just ended up with an extra $8,333 even with no Covid-19 losses?
Shout out to Meshugener!

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1706 on: June 17, 2020, 07:59:22 PM »
1. So there is no reason for an SE to take an EIDL (grant) as essentially the PPP ends up being a grant as well, correct?

2. When do you choose the covered period? On the loan docs?

3. How does a SE with no employees prove he used it 100% on "payroll? Just his word?
Does that mean, in the above scenario, the SE individual just ended up with an extra $8,333 even with no Covid-19 losses?

1) No point in taking the grant as it's deducted from PPP. If you're attracted to the loan terms in itself feel free to go for it, but that's separate from PPP.

2) If your loan is disbursed after 06/05/20 your covered period is automatically 24 weeks from your disbursement date (can't go past 12/31/20 though). These dates are noted on the forgiveness application, not on the loan application.

3) Not too clear. Might be automatic based on 2019 compensation (which you submit proof of when requesting the loan). Might need a transfer from business to personal account but doesn't look like it.
In the above scenario owner comp is $10,416 with a 24-week period, not $8,333.
Since the loan is less than 2MM no Covid losses are needed.

Offline Ygold

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1707 on: June 17, 2020, 08:06:12 PM »
1. So there is no reason for an SE to take an EIDL (grant) as essentially the PPP ends up being a grant as well, correct?

2. When do you choose the covered period? On the loan docs?

3. How does a SE with no employees prove he used it 100% on "payroll? Just his word?
Does that mean, in the above scenario, the SE individual just ended up with an extra $8,333 even with no Covid-19 losses?

Thanks!
Shout out to Meshugener!

Offline mme

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1708 on: June 18, 2020, 03:35:13 PM »
Is there anywhere i can see the full terms of the EIDL loan? i can't seem to find it anywhere :(

Offline av83

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1709 on: June 18, 2020, 06:32:57 PM »
IT SEEMS THAT IT WILL BE EITHER 8 WEEKS OR 24 WEEKS, NO IN BETWEEN
Any update on this? Did you see anywhere clearly stating this?

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1710 on: June 18, 2020, 06:43:07 PM »
Any update on this? Did you see anywhere clearly stating this?

Yes, nothing in between.

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1711 on: June 18, 2020, 06:48:38 PM »
In NY any SE who elects a 24-week period and received less than $12,096 in PPP should be able to stay on UI as long as they work 3 days or less weekly.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1712 on: June 18, 2020, 08:05:06 PM »
Anyone received EIDL advance/loan on more than 1 business with same owner?

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1713 on: June 18, 2020, 08:14:21 PM »
WEIRD...

Here’s where the advantage of the PPP Flexibility Act becomes obvious: PPP loans were made based on 2.5 months of the borrower's average monthly payroll costs for 2019. Now, borrowers will get 24 weeks —or nearly six months — to incur forgivable payroll costs. Thus, for many borrowers, the total “forgivable” costs will far exceed the loan proceeds; as a result, even if the borrower finds itself subject to a reduction in the forgivable amount because of reduced salary or headcount, the math is such that even AFTER the reduction, the forgivable costs will exceed the principal balance of the loan.


https://www.forbes.com/sites/anthonynitti/2020/06/17/the-not-quite-definitive-guide-to-paycheck-protection-program-loan-forgiveness

Offline aarony

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1714 on: June 18, 2020, 08:18:08 PM »
I Calculated the same. even with a large reduction in fte  the total amount of the loan Was still forgivable Based on the current forgiveness  applications

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1715 on: June 18, 2020, 08:20:55 PM »
It’s also worth nothing that there is no reason to believe that “owner-employees” do not include shareholders of a C corporation. The application singles out S corporation shareholders because pursuant to Revenue Procedure 91-26, these taxpayers must include health-insurance paid on their behalf as compensation; C corporation shareholders do not.

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1716 on: June 18, 2020, 08:24:09 PM »

Now, borrowers will get 24 weeks —or nearly six months — to incur forgivable payroll costs. Thus, for many borrowers, the total “forgivable” costs will far exceed the loan proceeds;

Not sure what they're saying. Unless you meet one of the wage safe harbors, the wages are annualized in all calculations. If you're cutting wages at more than 25% over the 24 weeks, you'll see a forgiveness reduction.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1717 on: June 18, 2020, 08:27:27 PM »
Not sure what they're saying. Unless you meet one of the wage safe harbors, the wages are annualized in all calculations. If you're cutting wages at more than 25% over the 24 weeks, you'll see a forgiveness reduction.
but over 24 weeks you can have annualized payroll per employee of 46k even if the loan amount was only 20k per employee(if employee earned 100k annuall). You will have a reduction of the 46k but still receive full forgivness 

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1718 on: June 18, 2020, 08:32:42 PM »
but over 24 weeks you can have annualized payroll per employee of 46k even if the loan amount was only 20k per employee(if employee earned 100k annuall). You will have a reduction of the 46k but still receive full forgivness

You mean if you paid one employee 46k and slashed another's salary by 80% you won't feel the effect of the reduction?

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1719 on: June 18, 2020, 08:37:01 PM »
You mean if you paid one employee 46k and slashed another's salary by 80% you won't feel the effect of the reduction?
Even the same employee. since the 46k you apply for forgivness will be reduced by lets say 30%, to 31K, however you only received 20k in the loan for the employee=full forgivness