Author Topic: SBA PPP and EIDL Small Business Loans (some money is forgivable)  (Read 535976 times)

Offline lakewood34

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2600 on: January 06, 2021, 02:37:23 PM »
This is what banks were/are getting:
In the CARES Act:
A .5% fee on loans below $350,000.00
A .3% fee on loans between $350,001.00 and $2,000,000.00
A 1% fee on loans between $2,000,001.00 and higher

In the Response and Relief Package:
A 50% fee on loans below $50,000.00 (capped at $2,500)
A 5% fee on loans between $50,001.00 and $350,000.00
A 3% fee on loans between $350,001.00 and $2,000,000.00

CRAZY increase.
i don't mean to question you but i am pretty sure that in round 1 banks got 5 percent of smaller loans not .5 percent

also if they are really making 2500 a loan i hope they have better customer service this time because honestly last time it was atrocious

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2601 on: January 06, 2021, 02:45:27 PM »
i don't mean to question you but i am pretty sure that in round 1 banks got 5 percent of smaller loans not .5 percent

also if they are really making 2500 a loan i hope they have better customer service this time because honestly last time it was atrocious
Need to double check- thanks.
Don't worry- as of now banks have not agreed to pass on a higher rate to referrers than last time, even though they're getting a huge raise.

Offline Hjay

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2602 on: January 06, 2021, 02:50:32 PM »
Indeed, apparently commissions went up. Commissions for larger loans are a smaller percentage of the loan amount, and might be capped, but it’s probably still significant.

Is it even legal for the lender to share their commission with you? If it is, please let me know where I can get in on this as it effectively means more PPP money for using that lender.

Why would it be illegal? I’m waiting to see a thread on DDF for splitting  commission  ;D

Offline Sport

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2603 on: January 06, 2021, 02:52:38 PM »
This is what banks were/are getting:
In the CARES Act:
A .5% fee on loans below $350,000.00
A .3% fee on loans between $350,001.00 and $2,000,000.00
A 1% fee on loans between $2,000,001.00 and higher

In the Response and Relief Package:
A 50% fee on loans below $50,000.00 (capped at $2,500)
A 5% fee on loans between $50,001.00 and $350,000.00
A 3% fee on loans between $350,001.00 and $2,000,000.00

CRAZY increase.
Keep in mind this is what the banks get, EU is a broker and they only get a portion of that and are passing on 20% of their portion.

Offline AsherO

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2604 on: January 06, 2021, 02:57:04 PM »
Don't worry- as of now banks have not agreed to pass on a higher rate to referrers than last time, even though they're getting a huge raise.

The major banks are going to rake in tens of billions in fees for this next round, a lot of which is pure profit. How much of that is reflected in their ~25-35% stock price increase these past 3-6 months?
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Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2605 on: January 06, 2021, 03:13:37 PM »
This is what banks were/are getting:
In the CARES Act:
A .5% fee on loans below $350,000.00
A .3% fee on loans between $350,001.00 and $2,000,000.00
A 1% fee on loans between $2,000,001.00 and higher

In the Response and Relief Package:
A 50% fee on loans below $50,000.00 (capped at $2,500)
A 5% fee on loans between $50,001.00 and $350,000.00
A 3% fee on loans between $350,001.00 and $2,000,000.00

CRAZY increase.
It was 5% and 3% not .5% and .3%
a $50,000 loan is still getting the same $2,500 they just increased that even smaller loans should receive $2,500 it should be worth for the banks to play with smaller loans also.
There is no crazy increase.

All small employers are getting now CRAZY INCREASES with being able to apply for PPP, ERC, FFCRA concurrently if they meet eligibility. a company with 10 employees paying them $50k yearly wages for a total of $500K payroll, can get now approx $300k between all these programs. Its HUGE HUGE money. I think most people didn't digest it still and there is definitely no reason why not to raise the stimulus to $2,000 or even $4,000 per person after businesses getting such windfalls
« Last Edit: January 06, 2021, 03:21:46 PM by TBD »

Offline ShimshonK

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2606 on: January 06, 2021, 03:18:47 PM »
What was the motivation for the govt to offer banks higher commissions??

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2607 on: January 06, 2021, 03:21:44 PM »
It was 5% and 3% not .5% and .3%
a $50,000 loan is still getting the same $2,500 they just increased that even smaller loans should receive $2,500 it should be worth for the banks to play with smaller loans also.
There is no crazy increase
You're right- it is 5% and 3%.
I do think that the 50% increase makes a big difference though (not huge  ;))

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2608 on: January 06, 2021, 03:23:12 PM »
What was the motivation for the govt to offer banks higher commissions??
To support the little guy. If you remember in the first round of funding (before the program was replenished), Chase and BofA reportedly gave loans to their big customers, and weren't really helping anyone else.

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2609 on: January 06, 2021, 03:24:13 PM »

All small employers are getting now CRAZY INCREASES with being able to apply for PPP, ERC, FFCRA concurrently if they meet eligibility. a company with 10 employees paying them $50k yearly wages for a total of $500K payroll, can get now approx $300k between all these programs. Its HUGE HUGE money. I think most people didn't digest it still and there is definitely no reason why not to raise the stimulus to $2,000 or even $4,000 per person after businesses getting such windfalls
You mean consecutively. You can't stack these programs.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2610 on: January 06, 2021, 03:24:37 PM »
What was the motivation for the govt to offer banks higher commissions??
That banks should offer smaller loans to small companies like this it looks nice that they are helping out small companies. The government will spend $10,000 to send the poor guy $5,000.... (like all child care programs in which if both parents work for $20,000 a year the government will spend $8,000 a year per child in child care benefits for 6 children, the parents should be able to work :'()

Offline AsherO

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2611 on: January 06, 2021, 04:01:27 PM »
All small employers are getting now CRAZY INCREASES with being able to apply for PPP, ERC, FFCRA concurrently if they meet eligibility. a company with 10 employees paying them $50k yearly wages for a total of $500K payroll, can get now approx $300k between all these programs. Its HUGE HUGE money. I think most people didn't digest it still and there is definitely no reason why not to raise the stimulus to $2,000 or even $4,000 per person after businesses getting such windfalls

Do independent contractors and/or firms with 1099 (but not w2) employees qualify for FFCRA and/or ETC? My guess is not, please CMIIW.
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Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2612 on: January 06, 2021, 04:10:46 PM »
Do independent contractors and/or firms with 1099 (but not w2) employees qualify for FFCRA and/or ETC? My guess is not, please CMIIW.
1099 'employees' are not eligible from the employers perspective for anything. They could be eligible in their own right.
FFCRA is available for independent contractors/self employed.
ERC is not available to owners or relatives of owners.

Offline AsherO

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2613 on: January 06, 2021, 04:15:38 PM »
FFCRA is available for independent contractors/self employed.

Thank you, very helpful. I claim this on my 2020 taxes? Details on your site?
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Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2614 on: January 06, 2021, 04:23:25 PM »
Thank you, very helpful. I claim this on my 2020 taxes? Details on your site?
Yep.
Regular employers claim this on their quarterly reports- I'm assuming your accountant will know how to claim this on your tax return (Schedule E?).

Offline AsherO

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2615 on: January 06, 2021, 05:33:32 PM »
Yep.
Regular employers claim this on their quarterly reports- I'm assuming your accountant will know how to claim this on your tax return (Schedule E?).

Accountant? I’m hoping TurboTax will cover this.
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Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2616 on: January 06, 2021, 05:42:01 PM »
Accountant? I’m hoping TurboTax will cover this.
Found the correct FAQ page for you: https://www.irs.gov/newsroom/special-issues-for-employees#specific-provisions-related-self-employed-individuals

Question 65

Based on the new bill Question 62 will be changed to allow SE's to use 2019 income for average daily income instead of 2020, so that they can up their credit.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2617 on: January 07, 2021, 01:52:02 AM »
ERC is not available to owners or relatives of owners.
It seems that it is available to owners and owner's spouse of a corporation just not to other relatives

https://www.irs.gov/newsroom/covid-19-related-employee-retention-credits-determining-qualified-wages-faqs

59. Are wages paid by an employer to employees who are related individuals considered qualified wages?
No. Wages paid to related individuals, as defined by section 51(i)(1) of the Internal Revenue Code (the "Code"), are not taken into account for purposes of the Employee Retention Credit. A related individual is any employee who has of any of the following relationships to the employee's employer who is an individual:

A child or a descendant of a child;
A brother, sister, stepbrother, or stepsister;
The father or mother, or an ancestor of either;
A stepfather or stepmother;
A niece or nephew;
An aunt or uncle;
A son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.
In addition, if the Eligible Employer is a corporation, then a related individual is any person that bears a relationship described above with an individual owning, directly or indirectly, more than 50 percent in value of the outstanding stock of the corporation.
« Last Edit: January 07, 2021, 02:00:59 AM by TBD »

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2618 on: January 07, 2021, 08:37:00 AM »
It seems that it is available to owners and owner's spouse of a corporation just not to other relatives
https://www.irs.gov/newsroom/covid-19-related-employee-retention-credits-determining-which-employers-are-eligible-to-claim-the-employee-retention-credit-faqs
Q23

Need to look into the spousal thing but I believe I did see it somewhere.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2619 on: January 07, 2021, 08:45:22 AM »