Author Topic: SBA PPP and EIDL Small Business Loans (some money is forgivable)  (Read 196999 times)

Offline ShimshonK

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2380 on: October 13, 2020, 05:04:20 AM »
Just saw this article which says it's probably better to just wait.
https://www.inquirer.com/news/sba-treasury-ppp-loans-small-business-administration-50000-forgiveness-20201012.html

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).

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2381 on: October 13, 2020, 09:10:05 AM »
At this point is it worth applying for forgiveness as a sole prop under 50k (or might they still pass law automatically forgiving)? And, is Kabbage supposed to have some sort of built-in forgiveness application? (Their website has always said "Loan forgiveness next steps are coming soon")
Also, why are they showing the loan balance creeping up (interest is being charged it seems), when first few months were supposed to be 0% interest?

Just saw this article which says it's probably better to just wait.
https://www.inquirer.com/news/sba-treasury-ppp-loans-small-business-administration-50000-forgiveness-20201012.html

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).

Now with the new forgiveness application it's almost like automatic forgiveness...

I don’t think Kabbage has opened their portal yet so you need to wait for that to apply for forgiveness regardless.

Don't worry about interest- they can't charge you for anything for the first 10 months after loan origination if your loan is forgiven.

I don't think they can retract and make PPP taxable (even if they haven't issued sole prop guidance)- they'd have a mob on their hands.

Offline ShimshonK

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2382 on: October 16, 2020, 05:07:51 PM »
Email from Kabbage - "An update about your PPP loan":

Quote
New site. Same great support.
Starting October 16, 2020, your Paycheck Protection Program (PPP) loan will be managed through K Servicing for Kabbage™.1
There are no changes to the details and repayment terms of your PPP loan. To get the latest information about PPP loans and loan forgiveness, log into your dashboard or visit kservicing.com.2
In connection with American Express’s acquisition of Kabbage, we’ve established K Servicing to maintain consistency in the way you manage your existing loans.1 Any Kabbage Funding loans or PPP loans taken prior to October 16, 2020 will continue to be managed by Kabbage, Inc. through K Servicing.
What this means for you:
You’ll manage PPP loan repayments and apply for loan forgiveness through the new K Servicing site using your current Kabbage username and password.
Learn more about Kabbage’s financial solutions offered by American Express – like payment processing, checking accounts and cash flow insights – at kabbage.com.
Sign into K Servicing
Have more questions?
Contact our team at 855-747-5135 or support@kservicing.com or review the FAQs.

Offline helpusout

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2383 on: October 21, 2020, 11:03:38 AM »
I appealed a denial from EIDL back in July or August due to mistaken category of business listed. is there any feedback on the appeal process? I tried to call a few times but the agents are pretty clueless..

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2384 on: November 01, 2020, 03:55:45 PM »
If you received a PPP loan of $2M+ check this out:
https://www.politico.com/news/2020/10/30/sba-big-businesses-ppp-loans-433736

Borrowers with loans of $2M+ will need to complete a questionnaire with details on quarterly revenue, capital expenditures, dividend payments, and whether any employees earned more than $250,000.

Offline YossieW

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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

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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

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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

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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

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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?

Offline AsherO

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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.

Offline hvaces42

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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.
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Offline AsherO

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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.

Offline hvaces42

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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.
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Offline cgr

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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

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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.
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Offline AsherO

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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?

Offline hvaces42

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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.
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Offline AsherO

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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 didn’t 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 »

Offline hvaces42

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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 didn’t 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.
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