Author Topic: SBA PPP and EIDL Small Business Loans (some money is forgivable)  (Read 73892 times)

Offline sprint

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1875 on: June 26, 2020, 10:43:00 AM »
Funny situation. 1065 Partnership owned by S-Corp (owned by the only active partner who receives a base salary, and not just a distribution). S-Corp received PPP predicated on the portion of salary paid in 2019 to the S Corp as "payroll". Can the partnership also receive PPP based on the same? Or is that a "double dip"? If yes, are the non active partners (distribution only) eligible to receive funds from the PPP loan if they would start on salary now?

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1876 on: June 26, 2020, 10:53:45 AM »
Funny situation. 1065 Partnership owned by S-Corp (owned by the only active partner who receives a base salary, and not just a distribution). S-Corp received PPP predicated on the portion of salary paid in 2019 to the S Corp as "payroll". Can the partnership also receive PPP based on the same? Or is that a "double dip"? If yes, are the non active partners (distribution only) eligible to receive funds from the PPP loan if they would start on salary now?

If they have a K-1 1065 they can receive PPP (although some banks aren't so eager). Both partners must apply together for the partnership as a whole- not based on their individual K-1s.
It's not double dipping as in the first case you're getting against payroll, while in the second against distributions that you pay taxes on (key difference between this and K-1 1120S).

Note that each owner applying for PPP is limited by 12/2.5 compensation with the 100k cap across all entities for a 24 week period (8/52 if going with 8 weeks). You can still take advantage of this by getting multiple loans and only using 60% of funds in each entity for owner comp, and then use the rest on rent/utilities to up your total forgiveness.

They don't need to take a salary- they need to follow the owner compensation limit rules.

Offline sprint

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1877 on: June 26, 2020, 11:31:27 AM »
If they have a K-1 1065 they can receive PPP (although some banks aren't so eager). Both partners must apply together for the partnership as a whole- not based on their individual K-1s.
It's not double dipping as in the first case you're getting against payroll, while in the second against distributions that you pay taxes on (key difference between this and K-1 1120S).

Note that each owner applying for PPP is limited by 12/2.5 compensation with the 100k cap across all entities for a 24 week period (8/52 if going with 8 weeks). You can still take advantage of this by getting multiple loans and only using 60% of funds in each entity for owner comp, and then use the rest on rent/utilities to up your total forgiveness.

They don't need to take a salary- they need to follow the owner compensation limit rules.

Will Kabbage or any of the other big ones do this?

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1878 on: June 26, 2020, 11:42:39 AM »
Will Kabbage or any of the other big ones do this?

I know someone who applied with a K-1 1065 at BlueVine and they didn't want to process his application because they didn't know how to handle a K-1. I find it hard to believe because it's clearly allowed, but that's the answer he got.

At this point just apply everywhere you can and hopefully someone will accept. Not much time left.
Loan will be based on 2.5X of line 14 for individual K-1.

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1879 on: June 26, 2020, 01:16:04 PM »
The chart give you the basics- Microloans generally have the shortest term but also has the smallest maximum loan...

You'd also want something with no prepayment penalty if you just want the loan for the 6 months of free money and then pay it all off once you need to start footing the bill...

Question- if I get a 50k microloan with a 6 month term, does that mean the SBA just gave me 50k straight up?
https://www.sba.gov/partners/lenders/microloan-program/list-lenders

It seems that micro loans are not from traditional lenders, only some non-profits

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1880 on: June 26, 2020, 02:05:27 PM »
Did the SBA pull the 06/16/20 updated forgiveness application?
I wasn't able to access from their site this morning, but was able to access it via direct link. Now the direct link is returning an error as well.

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1881 on: June 26, 2020, 02:15:07 PM »
Did the SBA pull the 06/16/20 updated forgiveness application?
I wasn't able to access from their site this morning, but was able to access it via direct link. Now the direct link is returning an error as well.
https://www.sba.gov/sites/default/files/2020-06/PPP%20Loan%20Forgiveness%20Application%20%28Revised%206.16.2020%29-fillable_0-508.pdf


Online lakewood34

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1883 on: June 26, 2020, 05:25:53 PM »
if someone actually had more business then last year and is self employed  can he still apply?

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1884 on: June 26, 2020, 05:32:44 PM »
if someone actually had more business then last year and is self employed  can he still apply?

Assuming you're referring to PPP:
If your loan is under 2MM (which it will be as SE) you can apply and do not need to have suffered economic hardship.

I actually recieved this question a few times today. I hope not too many are missing out because they assume they're ineligible.

Offline Joshua

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1885 on: June 28, 2020, 01:29:30 AM »
Which Banks are still processing applications?

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1887 on: June 28, 2020, 01:42:07 AM »
10.Question:  I am self-employed and was in operation on February 15, 2020, but was not in operation between February 15, 2019, and June 30, 2019.  I will file a Form 1040 Schedule C or Schedule F for 2020.  What is my maximum PPP loan amount?Answer:  In this case, your maximum PPP loan amount is generally equal to 2.5 times your average monthly payroll costs incurred in January and February 2020, plus the outstanding amount of any EIDL loan received between January 31, 2020, and April 3, 2020, that will be refinanced by the PPP loan.

https://www.sba.gov/sites/default/files/2020-06/How-to-Calculate-Loan-Amounts.pdf

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1888 on: June 28, 2020, 01:43:55 AM »
10.Question

Yet still nothing on how to calculate forgiveness in this scenario.

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1889 on: June 28, 2020, 02:07:36 AM »
https://realtime.inc.com/question/in-the-eidl-loan-docs-it-says-limits-on-distribution-of-assets-borrower-will-not--5ec6e6dc883ddc52f1535a8a

https://www.revelcpa.com/blog#:~:text=Here's%20the%20exact%20text%20so,or%20partner%20or%20any%20of

There’s a very tricky clause in here that vaguely alludes to not having the resources go to the owners—or even employees, at least not in unusual ways. Here’s the exact text so you can interpret for yourself:  “Borrower will not, without the prior written consent of SBA, make any distribution of Borrower’s assets, or give any preferential treatment, make any advance, directly or indirectly, by way of loan, gift, bonus, or otherwise, to any owner or partner or any of its employees, or to any company directly or indirectly controlling or affiliated with or controlled by Borrower, or any other company.”