Author Topic: SBA PPP and EIDL Small Business Loans (some money is forgivable)  (Read 264274 times)

Offline ShimshonK

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2220 on: August 03, 2020, 05:45:37 PM »
S corp owners are not eligible for PPP if they do not pay themselves a payroll (and don't have your accountant call up and yell at me but legally you must take a 'reasonable' payroll...), this simplifies matters because you can only apply as a sole prop based on your 2019 Schedule C without worrying about the new entity.
It's also best if you fund it into whatever bank account you used for the sole prop and not into the S corp bank account if it has its own. Best not to create confusion and links between the two entities.

I'm not an accountant- my background is in finance. Thanks for the kind words :).

My accountant is my father :)
Yes, I'll be taking a salary, just haven't set it up yet. Will probably set it up as once annually payroll. There's too many variables in play there, that it seems doubful I can get approved for the S Corp, so ya, I'll just try for my 2019 Schedule C. Absolutely, I won't put down my new business bank account.
Thanks alot, I'll keep you posted.

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2221 on: August 03, 2020, 05:48:43 PM »
My accountant is my father :)

Lol. No more lectures then...

Offline ShimshonK

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2222 on: August 03, 2020, 07:47:15 PM »
S corp owners are not eligible for PPP if they do not pay themselves a payroll (and don't have your accountant call up and yell at me but legally you must take a 'reasonable' payroll...), this simplifies matters because you can only apply as a sole prop based on your 2019 Schedule C without worrying about the new entity.
It's also best if you fund it into whatever bank account you used for the sole prop and not into the S corp bank account if it has its own. Best not to create confusion and links between the two entities.

I'm not an accountant- my background is in finance. Thanks for the kind words :).

Application currently under review at BlueVine. Might be too late to change anything now, but there is one way I could potentially have done much better, let me know your thoughts...
While I was planning on counting my 2020 January and February income through my business (for tax purposes), I didn't really open my business until March. So maybe I could've still counted my Jan-Feb as Sole Prop income, and then applied using my average in Jan-Feb and be eligible for significantly more money.
Does that make sense? Would I likely have been approved for that? Simple to apply using Jan-Feb averages or does that require something else? They just trust the numbers you provide? Could/should I still cancel my initial application and do it that way?

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2223 on: August 03, 2020, 08:02:58 PM »
Application currently under review at BlueVine. Might be too late to change anything now, but there is one way I could potentially have done much better, let me know your thoughts...
While I was planning on counting my 2020 January and February income through my business (for tax purposes), I didn't really open my business until March. So maybe I could've still counted my Jan-Feb as Sole Prop income, and then applied using my average in Jan-Feb and be eligible for significantly more money.
Does that make sense? Would I likely have been approved for that? Simple to apply using Jan-Feb averages or does that require something else? They just trust the numbers you provide? Could/should I still cancel my initial application and do it that way?

You can only use Jan and Feb of 2020 if you opened your business in late 2019. If the sole prop been doing business for majority of 2019 or earlier you must use 2019 and can't go with 2020 (it's not a personal choice which one to use).

Offline ShimshonK

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2224 on: August 03, 2020, 08:07:50 PM »
You can only use Jan and Feb of 2020 if you opened your business in late 2019. If the sole prop been doing business for majority of 2019 or earlier you must use 2019 and can't go with 2020 (it's not a personal choice which one to use).
Got it OK, thanks.

Offline ShimshonK

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2225 on: August 04, 2020, 12:04:07 PM »
Been over 17 hours since BlueVine application under review and sumbitted Schedule C. Any idea why it's taking so long, and is there anything I should do?

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2226 on: August 04, 2020, 02:53:58 PM »
I am trying to apply for PPP for a sole prop who started end of 2019. I need to use Jan and Feb 2020 income. Anyone know or have experience with a bank who does that?

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2227 on: August 04, 2020, 04:46:15 PM »
PSA:
The PPP deadline is this Saturday, August 8.

I had at least 10 people reach out today who didn't realize they were eligible. It seems that this is most common with individuals who have a 1099 and are not aware that that translates as a Schedule C on their return (and that they are sole props because of it).

I know that it's not possible to get the message out to everyone, but if you know someone who has a 1099 (or if you want to be bolder a business that issues 1099s) be so kind as to inform them of the possibility of PPP eligibility. All it takes is a few seconds to check if your 2019 Schedule C has positive income on line 31.

I'm taking PPP eligibility questions at chaiplus1@gmail.com so feel free to point them in my direction.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2228 on: August 04, 2020, 05:18:28 PM »
Can someone with Household income HSH apply for a PPP loan without schedule C, only tax return?
Bump

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2229 on: August 04, 2020, 05:20:43 PM »
Can someone with Household income HSH apply for a PPP loan without schedule C, only tax return? Anyone with actual approval?

I have no experience with HSH but as far as I know no bank will approve a loan without one of the required docs (K1, Schedule C, W3/940/941).

Offline ShimshonK

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2230 on: August 04, 2020, 06:41:40 PM »
Been over 17 hours since BlueVine application under review and sumbitted Schedule C. Any idea why it's taking so long, and is there anything I should do?
24 hours now with no update  :(
Should I try a new application with Kabbage?

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2231 on: August 04, 2020, 06:43:46 PM »
24 hours now with no update  :(
Should I try a new application with Kabbage?

Do you want to go 24 days with no update? That was more or less my experience with Kabbage.
I've been waiting over 5 years with bated breath for someone to say that!
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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2232 on: August 04, 2020, 06:52:02 PM »
24 hours now with no update  :(
Should I try a new application with Kabbage?

It is odd for BlueVine, but there's no restriction to submitting multiple applications so no harm in trying Kabbage. If BlueVine already secured an SBA # for you you'll get rejected- otherwise you'll get approved with whoever secures the SBA # first.

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2233 on: August 04, 2020, 11:49:44 PM »
New SBA PPP interim rules released today.
https://home.treasury.gov/system/files/136/PPP--Loan-Forgiveness-FAQs.pdf

Didn't do a deep dive yet but what caught my eye is that they're capping forgiveness for C/S Corp retirement contributions at 2.5/12 of 2019 retirement contributions.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2234 on: August 05, 2020, 01:34:08 AM »
New SBA PPP interim rules released today.
https://home.treasury.gov/system/files/136/PPP--Loan-Forgiveness-FAQs.pdf

Didn't do a deep dive yet but what caught my eye is that they're capping forgiveness for C/S Corp retirement contributions at 2.5/12 of 2019 retirement contributions.
Question:  When calculating the FTE Reduction Exceptions in Table 1 of the PPPSchedule A Worksheet on the Loan Forgiveness Application (SBA Form 3508 or lenderequivalent), do borrowers include employees who made more than $100,000 in 2019(those listed in Table 2 of the PPP Schedule A Worksheet)?Answer:  Yes.  The FTE Reduction Exceptions apply to all employees, not just thosewho would be listed in Table 1 of the Loan Forgiveness Application (SBA Form 3508 orlender equivalent). Borrowers should therefore include employees who made more than$100,000 in the FTE Reduction Exception line in Table 1 of the PPP Schedule AWorksheet

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2235 on: August 05, 2020, 09:54:27 AM »
New SBA PPP interim rules released today.
https://home.treasury.gov/system/files/136/PPP--Loan-Forgiveness-FAQs.pdf

Didn't do a deep dive yet but what caught my eye is that they're capping forgiveness for C/S Corp retirement contributions at 2.5/12 of 2019 retirement contributions.

Summary:
  • While paid or incurred retirement and healthcare contributions are eligible for forgiveness, accelerated payments cannot be included. (employee and where applicable for employer as well)
  • C & S Corporation owner's forgiveness on retirement contributions is capped by 2.5/12 of 2019 contributions
  • General Partners (K-1 1065) compensation is only eligible for forgiveness if payments to partners are made during the covered period (this is not spelled out for sole props so perhaps it's not a requirement for them)
  • Interest on unsecured loans are not eligible for forgiveness
  • FTE reduction exceptions apply to those earning over 100k as well

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2236 on: August 05, 2020, 10:55:00 AM »
Hoping someone here can help:
I'm trying to assist someone in find a bank for PPP. It's a simple Schedule C but the applicant originally misunderstood one of the questions and answered it incorrectly with BlueVine, Kabbage, and Cross River so they won't let the applicant apply again even with a different email.

I suggested Lendio but apparently they use Kabbage/Cross River so that was rejected for the same reason.
Any other banks? Can one apply with Dime without opening a bank account?

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2237 on: August 05, 2020, 11:19:59 AM »
Has anyone gotten PPP through http://www.pwginsurance.com
?

Offline coffeebean

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2238 on: August 05, 2020, 11:24:23 AM »
Does my average monthly payroll have to match with section 31 if I'm a sole proprietor? How do I calculate it? What if I only worked 3 months in 2019 can I devide section 31 by 3?
I try to sound as intelligent as possible.

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2239 on: August 05, 2020, 11:54:42 AM »
Does my average monthly payroll have to match with section 31 if I'm a sole proprietor? How do I calculate it? What if I only worked 3 months in 2019 can I devide section 31 by 3?

I had a report from someone who applied with Kabbage that when he put in that the company was formed mid-2019, they automatically divided his compensation by the # of months left in 2019 from that date.