Author Topic: SBA PPP and EIDL Small Business Loans (some money is forgivable)  (Read 368571 times)

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2060 on: July 12, 2020, 01:01:20 AM »
Having allocated the full $20 billion that was appropriated by Congress, SBA will discontinue making EIDL Advances to new applicants. By law, the SBA is not permitted to issue new EIDL Advances once all program funding has been obligated.
EIDL loan applications will still be processed even though the Advance is no longer available.
Is this from the SBA? Because I've seen this from one or two unreputable sources, and not from the SBA or any source I'd trust.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2061 on: July 12, 2020, 01:06:13 AM »
Is this from the SBA? Because I've seen this from one or two unreputable sources, and not from the SBA or any source I'd trust.
Yes. Received email from SBA.

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2062 on: July 12, 2020, 01:17:19 AM »
Yes. Received email from SBA.
Ok thanks

Offline est

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2063 on: July 12, 2020, 12:21:12 PM »
Is this is effecting PPP?

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2064 on: July 12, 2020, 12:44:25 PM »
Is this is effecting PPP?

Not directly, but perhaps those who would have only received 1k-2k from PPP opted for the EIDL grant since it's a simplified process, and now that that's no longer available, they will go for PPP which might deplete funds faster. Again we're talking small numbers so I doubt we'll see a direct effect.

Offline nafnaf12

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2065 on: July 12, 2020, 01:01:15 PM »
Having allocated the full $20 billion that was appropriated by Congress, SBA will discontinue making EIDL Advances to new applicants. By law, the SBA is not permitted to issue new EIDL Advances once all program funding has been obligated.
EIDL loan applications will still be processed even though the Advance is no longer available.
are existing applications effected as well, or only new ones? Applied on Thursday.
A smooth sea never made a skilled sailor.

Offline Elikip

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2066 on: July 12, 2020, 07:58:35 PM »
For LLC sole member, what are the parameters for eligibility? Link anyone? (no wiki, combing thru pages didn't yield info) And which to apply for, PPP or EIDL?

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2067 on: July 12, 2020, 08:04:30 PM »
For LLC sole member, what are the parameters for eligibility? Link anyone? (no wiki, combing thru pages didn't yield info) And which to apply for, PPP or EIDL?

They're very different programs.

PPP- fully forgivable loan
EIDL- loan at 3.75%, 30 year term

For PPP any loans under 2MM are considered as though made in good faith as it relates to economic uncertainty.
For EIDL you're certifying that you've suffered "substantial economic injury".

Offline Elikip

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2068 on: July 12, 2020, 08:06:42 PM »
They're very different programs.

PPP- fully forgivable loan
EIDL- loan at 3.75%, 30 year term

For PPP any loans under 2MM are considered as though made in good faith as it relates to economic uncertainty.
For EIDL you're certifying that you've suffered "substantial economic injury".
Thanks,
Given PPP for the most part is to be allocated towards Payroll and rent, is it forgivable if Sole member pays him/herself out the loss/difference in earnings in 2020 compared to 2019 and rent?

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2069 on: July 12, 2020, 08:17:35 PM »
Thanks,
PPP forgivable if Sole members pays him/herself out the loss/difference in earnings in 2020 compared to 2019?

No.

As a sole prop you get your Schedule C Line 31 divided by 12, times 2.5, forgivable over a period of 24 weeks from loan origination. Best practice is to pay yourself that amount from business to personal account so there's a record (although it's not clear that sole props/owners need to pay themselves for forgiveness).

If it's an LLC filing as an S Corp and you don't pay yourself via payroll, you're not eligible for PPP. If you do run payroll, your 2019 payroll divided by 12, times 2.5, will be forgivable as owner compensation.

You need to spend 60% as owner comp, and can spend the remaining 40% as rent but since you'll only receive 2019 divided by 12 times 2.5 as your loan amount, you'll be spending 100% on owner comp automatically.

Offline Hjay

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2070 on: July 12, 2020, 11:20:07 PM »
Got an email from Eatern Union today about loan amounts possibly being raised. How’s that going to work?

Offline shulemw

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2071 on: July 13, 2020, 12:08:03 AM »
On EIDL guidlines i see as follows

We do not have a dollar amount or percenrage amount loss that you need to have. Even one dollar loss is a loss

So doesnt look needs to be substantial loss...

They're very different programs.

PPP- fully forgivable loan
EIDL- loan at 3.75%, 30 year term

For PPP any loans under 2MM are considered as though made in good faith as it relates to economic uncertainty.
For EIDL you're certifying that you've suffered "substantial economic injury".

Offline shulemw

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2072 on: July 13, 2020, 12:10:25 AM »
From their website


A business needs to define its loss in comparison to its 2019
operations/financials. Losses will be compared to the effective
incident period starting on January 31, 2020. Just a loss needs to be
reported; there is no threshold of a percentage or dollar amount.

On EIDL guidlines i see as follows

We do not have a dollar amount or percenrage amount loss that you need to have. Even one dollar loss is a loss

So doesnt look needs to be substantial loss...

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2073 on: July 13, 2020, 12:37:47 AM »
From their website


A business needs to define its loss in comparison to its 2019
operations/financials. Losses will be compared to the effective
incident period starting on January 31, 2020. Just a loss needs to be
reported; there is no threshold of a percentage or dollar amount.
Have suffered, or are likely to suffer, substantial economic injury as a
result of the disaster



https://www.sba.gov/sites/default/files/articles/EIDL_Information_and_Documentation_-_3-23-2020.pdf

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2074 on: July 13, 2020, 12:58:39 AM »
Have suffered, or are likely to suffer, substantial economic injury as a
result of the disaster



https://www.sba.gov/sites/default/files/articles/EIDL_Information_and_Documentation_-_3-23-2020.pdf

Note that suffering economic injury does not mean that top-line revenue is affected- it means you have trouble paying the bills.

I've been going with this:
https://www.jdsupra.com/legalnews/sba-economic-injury-disaster-loans-49340/- they state that if the business experiences a decrease in income from operations or a decrease in working capital resulting in the business being unable to meet its obligations you're eligible for EIDL.

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2075 on: July 13, 2020, 12:58:53 AM »
Got an email from Eatern Union today about loan amounts possibly being raised. How’s that going to work?
EIDL or PPP?

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2076 on: July 13, 2020, 01:11:34 AM »
Note that suffering economic injury does not mean that top-line revenue is affected- it means you have trouble paying the bills.

I've been going with this:
https://www.jdsupra.com/legalnews/sba-economic-injury-disaster-loans-49340/- they state that if the business experiences a decrease in income from operations or a decrease in working capital resulting in the business being unable to meet its obligations you're eligible for EIDL.
But LIKELY TO SUFFER is enough even if in the end you didn't suffer....

Offline Hjay

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Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2078 on: July 13, 2020, 09:28:30 AM »


Don't want to burst your bubble but it's one of countless bills floating around hoping to be part of the next stimulus. No closer to being real than a month a go except for the passage of time.

Offline nafnaf12

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2079 on: July 14, 2020, 01:16:04 PM »
Was able to apply for EIDL this morning
Are they still offering the grant?
A smooth sea never made a skilled sailor.