Author Topic: SBA PPP and EIDL Small Business Loans (some money is forgivable)  (Read 95270 times)

Offline YossieW

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: May 2014
  • Posts: 3720
  • Total likes: 251
  • DansDeals.com Hat Tips 448
    • View Profile
  • Location: Los Angeles
Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2385 on: November 18, 2020, 01:44:52 PM »
is there any reason to wait on PPP loan forgiveness or should you do it as soon as possible now that places, at least Kabbage has opened up the forgiveness application ?

Offline cgr

  • Dansdeals Lifetime Platinum Elite
  • *******
  • Join Date: Aug 2017
  • Posts: 2312
  • Total likes: 399
  • DansDeals.com Hat Tips 4
    • View Profile
Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2386 on: November 19, 2020, 01:15:38 PM »
I also now realize a different potential reason to wait it out... if they conclude that the forgiven loan is taxable, we should be able to report that income in whichever year (2020 or 2021) is more advantageous to oneself (would need to decide that before the year ends).

Based on the new Treasury and IRS ruling, this is no longer true.
The new ruling states that businesses must claim PPP and are prevented from deducting the correlated expenses on their 2020 tax return, if there is reasonable expectation that forgiveness will be granted. This is true even if no forgiveness application has been filed yet, as long as one plans to file for forgiveness at a later date.
https://home.treasury.gov/news/press-releases/sm1187

Detailed writeup in my signature block below.

Offline beeweegee

  • Dansdeals Lifetime Platinum Elite
  • *******
  • Join Date: Sep 2013
  • Posts: 1539
  • Total likes: 79
  • DansDeals.com Hat Tips 2
    • View Profile
  • Location: New York, NY
Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2387 on: November 19, 2020, 01:56:40 PM »
is there any reason to wait on PPP loan forgiveness or should you do it as soon as possible now that places, at least Kabbage has opened up the forgiveness application ?
Same q. For a straightforward sole prop claiming full forgiveness for self, any reason to wait at this point?

Offline ShimshonK

  • Dansdeals Gold Elite
  • ***
  • Join Date: Nov 2018
  • Posts: 157
  • Total likes: 33
  • DansDeals.com Hat Tips 2
    • View Profile
Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2388 on: November 19, 2020, 07:07:46 PM »
Based on the new Treasury and IRS ruling, this is no longer true.
The new ruling states that businesses must claim PPP and are prevented from deducting the correlated expenses on their 2020 tax return, if there is reasonable expectation that forgiveness will be granted. This is true even if no forgiveness application has been filed yet, as long as one plans to file for forgiveness at a later date.
https://home.treasury.gov/news/press-releases/sm1187

Detailed writeup in my signature block below.

True. They also confirmed that the expenses paid with PPP money is not deductible, so effectively, tax will be owed on most PPP loans (though Congress could still pass legislation against that).
I read somewhere today that sole props (and single member llcs) are the exception and will not owe tax, since the loan is going completely to owner pay.

Offline mgarfin

  • Dansdeals Lifetime Platinum Elite
  • *******
  • Join Date: Dec 2012
  • Posts: 2169
  • Total likes: 158
  • DansDeals.com Hat Tips 2
    • View Profile
Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2389 on: November 23, 2020, 12:37:28 PM »
Dear Borrower:

Your business was recently approved for an Economic Injury Disaster Loan from the U.S. Small Business
Administration (SBA). The executed Loan Authorization and Agreement contains a requirement for
collateral which will require written consent of the SBA to seek future advances under any superior liens
on the collateral securing this loan. This requirement has been determined by SBA to be unnecessary and
as a result has been removed from the Loan Authorization and Agreement.
The following is the revised collateral requirement:

REQUIREMENTS RELATIVE TO COLLATERAL ∑ Borrower will not sell or transfer any collateral
(except normal inventory turnover in the ordinary course of business) described in the "Collateral"
paragraph hereof without the prior written consent of SBA.

This letter is a permanent amendment to your Loan Authorization and Agreement.
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.
If you have any questions, please contact us at the toll-free number listed above.
Sincerely,
Application Processing Department



In layman's terms, what does it say?

Online AsherO

  • Global Moderator
  • Dansdeals Lifetime 20K Presidential Platinum Elite
  • **********
  • Join Date: May 2008
  • Posts: 22471
  • Total likes: 888
  • DansDeals.com Hat Tips 74
    • View Profile
  • Location: NYC
Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2390 on: November 23, 2020, 12:49:42 PM »
Anyone else get an inquiry from SBA about hazard insurance for their business? I'm a sole prop with no business-owned assets and they're still trying to insist I need to cover any personal assets used for the business.
My barber needs your support, heís a real sweetheart.

https://www.gofundme.com/f/save-our-barber-shop

Offline hvaces42

  • Dansdeals Lifetime Presidential Platinum Elite
  • *********
  • Join Date: Nov 2013
  • Posts: 5054
  • Total likes: 862
  • DansDeals.com Hat Tips 14
    • View Profile
Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2391 on: November 23, 2020, 01:28:06 PM »
Anyone else get an inquiry from SBA about hazard insurance for their business? I'm a sole prop with no business-owned assets and they're still trying to insist I need to cover any personal assets used for the business.
If your loan is more than $25,000 then you are required by the loan documents to have Hazard insurance. If it is less then that you should let them know. I had them request it and then when I pointed it out to them they dropped the request.
Fair warning - Any PMs sent in response to forum posts are fair game for ridicule in public.

Online AsherO

  • Global Moderator
  • Dansdeals Lifetime 20K Presidential Platinum Elite
  • **********
  • Join Date: May 2008
  • Posts: 22471
  • Total likes: 888
  • DansDeals.com Hat Tips 74
    • View Profile
  • Location: NYC
Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2392 on: November 23, 2020, 01:33:40 PM »
If your loan is more than $25,000 then you are required by the loan documents to have Hazard insurance. If it is less then that you should let them know. I had them request it and then when I pointed it out to them they dropped the request.

I thought that was just for collateral. I'm over $25k.
My barber needs your support, heís a real sweetheart.

https://www.gofundme.com/f/save-our-barber-shop

Offline hvaces42

  • Dansdeals Lifetime Presidential Platinum Elite
  • *********
  • Join Date: Nov 2013
  • Posts: 5054
  • Total likes: 862
  • DansDeals.com Hat Tips 14
    • View Profile
Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2393 on: November 23, 2020, 01:54:53 PM »
I thought that was just for collateral. I'm over $25k.
I was offered more than $25k and declined because it required a UCC filing, which makes the loan public record. Read the loan documents its in there.
Fair warning - Any PMs sent in response to forum posts are fair game for ridicule in public.

Offline cgr

  • Dansdeals Lifetime Platinum Elite
  • *******
  • Join Date: Aug 2017
  • Posts: 2312
  • Total likes: 399
  • DansDeals.com Hat Tips 4
    • View Profile
Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2394 on: November 23, 2020, 02:16:03 PM »
I was offered more than $25k and declined because it required a UCC filing, which makes the loan public record. Read the loan documents its in there.
FYI you could accept just 24,999.99 of the offer if you don't want to trigger the $25k requirements.

Offline hvaces42

  • Dansdeals Lifetime Presidential Platinum Elite
  • *********
  • Join Date: Nov 2013
  • Posts: 5054
  • Total likes: 862
  • DansDeals.com Hat Tips 14
    • View Profile
Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2395 on: November 23, 2020, 02:36:53 PM »
FYI you could accept just 24,999.99 of the offer if you don't want to trigger the $25k requirements.
I know. I was offered slightly more and accepted exactly $25k. They didnt need UCC at exactly $25k either.
Fair warning - Any PMs sent in response to forum posts are fair game for ridicule in public.

Online AsherO

  • Global Moderator
  • Dansdeals Lifetime 20K Presidential Platinum Elite
  • **********
  • Join Date: May 2008
  • Posts: 22471
  • Total likes: 888
  • DansDeals.com Hat Tips 74
    • View Profile
  • Location: NYC
Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2396 on: November 23, 2020, 03:45:06 PM »
I was offered more than $25k and declined because it required a UCC filing, which makes the loan public record. Read the loan documents its in there.

For an unincorporated sole-prop as well? What's the downside of a UCC? It's already happened, but should I be concerned about it?
My barber needs your support, heís a real sweetheart.

https://www.gofundme.com/f/save-our-barber-shop

Offline hvaces42

  • Dansdeals Lifetime Presidential Platinum Elite
  • *********
  • Join Date: Nov 2013
  • Posts: 5054
  • Total likes: 862
  • DansDeals.com Hat Tips 14
    • View Profile
Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2397 on: November 25, 2020, 11:57:50 AM »
For an unincorporated sole-prop as well? What's the downside of a UCC? It's already happened, but should I be concerned about it?
No, mine was an LLC. UCC shows up on title search so if you're getting a mortgage or refinancing it may show up as something the bank will want removed before you get approved.
Fair warning - Any PMs sent in response to forum posts are fair game for ridicule in public.

Online AsherO

  • Global Moderator
  • Dansdeals Lifetime 20K Presidential Platinum Elite
  • **********
  • Join Date: May 2008
  • Posts: 22471
  • Total likes: 888
  • DansDeals.com Hat Tips 74
    • View Profile
  • Location: NYC
Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2398 on: November 25, 2020, 11:58:50 AM »
No, mine was an LLC. UCC shows up on title search so if you're getting a mortgage or refinancing it may show up as something the bank will want removed before you get approved.

Is there a way for me to search for this on my name?

ETA:

I didnít find it here:
https://appext20.dos.ny.gov/pls/ucc_public/web_search.main_frame

How soon would it show up?

ETA2:

I did find it, but using my name as business name. Think a title search would find that? hmmm
« Last Edit: November 25, 2020, 12:04:17 PM by AsherO »
My barber needs your support, heís a real sweetheart.

https://www.gofundme.com/f/save-our-barber-shop

Offline hvaces42

  • Dansdeals Lifetime Presidential Platinum Elite
  • *********
  • Join Date: Nov 2013
  • Posts: 5054
  • Total likes: 862
  • DansDeals.com Hat Tips 14
    • View Profile
Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2399 on: November 25, 2020, 11:15:02 PM »
Is there a way for me to search for this on my name?

ETA:

I didnít find it here:
https://appext20.dos.ny.gov/pls/ucc_public/web_search.main_frame

How soon would it show up?

ETA2:

I did find it, but using my name as business name. Think a title search would find that? hmmm
Count on it.
Fair warning - Any PMs sent in response to forum posts are fair game for ridicule in public.