SBA PPP and EIDL Small Business Loans (some money is forgivable)

[AsherO]

Thanks!
Can you up the salary of employees that were already working in 2019?

Just to cash out your PPP earlier? If you get audited you’ll have a hard time explaining that...

Read upthread, it was implied/suggested that you could apply for (but not fund) your second draw sooner than 8 weeks after your first draw. Not sure how legit that is but check out the discussion.

[cgr]

Thanks!
Can you up the salary of employees that were already working in 2019?

Yes. Raises/bonuses are covered- again only up to 1923 (100k annualized) per week.

[shulemw]

I had one worker and me myself as the owner taking payroll. Can I increase my payroll now or only the workers payroll?

[cgr]

I had one worker and me myself as the owner taking payroll. Can I increase my payroll now or only the workers payroll?

You're capped at the average weekly payroll that you included for yourself in your application.
No bonuses- sorry.

[TBD]

I respectfully disagree.
Applications entered about 2.5 weeks ago are facing some issues and taking longer to fund, but new applications are flying through the system and are mostly funded between 3 days and a week.

I know of a Biz2credit application that was submitted yesterday afternoon (Feb 9), got now approval. 36 hrs

[lifetimedeals]

Anyone knows of any small business grants?

[AsherO]

Anyone knows of any small business grants?

This one just closed, but you can register to be notified if they open more rounds:

https://liscnational.cmail19.com/t/r-l-juuhyuik-ozltwlkl-y/

ChaiPlus1 has a relevant page:

http://chaiplus1.com/news/small-business-grants/

[cgr]

I know of a Biz2credit application that was submitted yesterday afternoon (Feb 9), got now approval. 36 hrs

I think BlueVine wins worst bank award in this round...

[jaywhy]

I think BlueVine wins worst bank award in this round...

Agreed. Had a bunch of apps get stuck and/or declined via bluevine and cross river.
Biz2credit has been on the ball and gotten them pushed through.

[David101]

Trying to get 1st rd ppp. I've applied as a sole prop with a 2020 1040c, recent bank statement, and a FEB 2020 statement that wasn't my primary account used at the time but has my name and some minor transactions.

1. Will the 2020 statement I have cause app to be declined or does this not matter?

2. I've applied directly with CRB and got the manual review message anyone get past this?

3. I applied with Bluevine two days ago and today was declined reason stated "Unable to verify Applicant's identity from documents submitted or discrepancies in information submitted" called them to see what this can be and they basically said they can't tell me but that its a hard decline and there's nothing they can do about it. Anyone know what this can be? I didn't know they use CRB at the time, does this likely mean my CRB app will get declined as well?

Any suggestions who I might try to get this done in a timely matter are appreciated.

[wanderingjew678]

I think BlueVine wins worst bank award in this round...

My app with biz2credit is stuck at submitted to SBA for almost 2 weeks. Should I submit again?

[Traveler718]

1) I applied for 1st draw and was approved by SBA in January, but didn't actually receive funds in my account until February. Can I use the money for January payroll, rent, and utilities?

2) I hadn't compiled by 2020 numbers yet, so I applied based on 2019 income. I know I can't give myself a raise, but can I pay myself based on my (higher) 2020 income? If not, can I at least pay utilities and/or rent at current levels, even if they're higher than what they were in 2019?

3) I'm a sole proprietor with a legal LLC and EIN and business account, but I generally use my personal account for deposits and expenses and keep records of what's business-related for tax purposes. For loan purposes, can I just transfer the appropriate amounts to my personal account to "pay" my monthly salary and cover my rent and utilities, or if not, how should it be done?

4) Based on posted numbers, does it look like the PPP funds will last through 3/30 for those hoping to apply for 2nd draw in late March?

5) I am eligible for 2nd draw, as I had one quarter in 2020 with an income decrease of 25%+. But as noted above, my official bank records are sloppy since so much is mixed with personal. What are my best options for documenting the income decline?

6) I see that my location is considered low-income, but if I didn't apply for EIDL until now, is there anything I can do at this point to get it?

[cgr]

Trying to get 1st rd ppp. I've applied as a sole prop with a 2020 1040c, recent bank statement, and a FEB 2020 statement that wasn't my primary account used at the time but has my name and some minor transactions.

1. Will the 2020 statement I have cause app to be declined or does this not matter?

2. I've applied directly with CRB and got the manual review message anyone get past this?

3. I applied with Bluevine two days ago and today was declined reason stated "Unable to verify Applicant's identity from documents submitted or discrepancies in information submitted" called them to see what this can be and they basically said they can't tell me but that its a hard decline and there's nothing they can do about it. Anyone know what this can be? I didn't know they use CRB at the time, does this likely mean my CRB app will get declined as well?

Any suggestions who I might try to get this done in a timely matter are appreciated.

1) if the name matches it should be fine
2) yes, some have
3) being that it's Bluevine it doesn't mean much...

If you get denied by CRB reach out to me.

[cgr]

My app with biz2credit is stuck at submitted to SBA for almost 2 weeks. Should I submit again?

Are you sure it was submitted to the SBA?
PM me- I might be able to help.

[cgr]

1) I applied for 1st draw and was approved by SBA in January, but didn't actually receive funds in my account until February. Can I use the money for January payroll, rent, and utilities?

2) I hadn't compiled by 2020 numbers yet, so I applied based on 2019 income. I know I can't give myself a raise, but can I pay myself based on my (higher) 2020 income? If not, can I at least pay utilities and/or rent at current levels, even if they're higher than what they were in 2019?

3) I'm a sole proprietor with a legal LLC and EIN and business account, but I generally use my personal account for deposits and expenses and keep records of what's business-related for tax purposes. For loan purposes, can I just transfer the appropriate amounts to my personal account to "pay" my monthly salary and cover my rent and utilities, or if not, how should it be done?

4) Based on posted numbers, does it look like the PPP funds will last through 3/30 for those hoping to apply for 2nd draw in late March?

5) I am eligible for 2nd draw, as I had one quarter in 2020 with an income decrease of 25%+. But as noted above, my official bank records are sloppy since so much is mixed with personal. What are my best options for documenting the income decline?

6) I see that my location is considered low-income, but if I didn't apply for EIDL until now, is there anything I can do at this point to get it?

1) funds can be used for payroll/expenses "paid or incurred" from when you received funds. If you paid those in January you can't include, but if you're paying now you can.

2) no, you can only pay yourself based on what you used for your loan. Other expenses you can pay even if they increased.

3) for owner compensation yes you can transfer, for other expenses best to pay out of the account that was funded.

4) yes- both banks and the SBA seem to think it'll last

5) create financial statements (sales reports)

6) you'll only be eligible if they allow those who apply for EIDL after 12/27/20 to get the grant- so far they're not.

[TBD]

Can you the Owner get the Credit for your personal payroll or profit?
This is the golden question, isn’t it? Regrettably, the answer is somewhat in a gray area. All we know regarding this particular detail comes from the IRS.gov Newsroom and the FAQ section regarding the ERTC. 

For sole proprietors, the answer is no. The IRS in FAQ #23 makes it clear that they are not going to allow the ERTC for sole proprietors under their interpretation of the CARES Act. They also clearly state that the FAQ section has not been updated under the Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted December 27, 2020. Most professionals agree that the new legislation doesn’t change the rule for sole proprietors.

However, FAQ #23 does not address corporations, or more specifically, S-Corporation owners. In fact, FAQ #59 states that S-Corporations are allowed to take the ERTC for their employees (assuming the business owner complies with all the other rules, including not claiming payroll for the ERTC that was covered with PPP money).

FAQ #59 further states that payroll for “related individuals” of the S-Corporation owners cannot be used for calculating the ERTC. However, it conspicuously does not state that the "owner" is considered a related individual.

So, when it comes to the action owners of S-Corporations holding 50% or more of the stock, the safe bet is to consider them a "related individual," and thus the owner cannot receive the ERTC on their own payroll. This cautious interpretation would fall in line with other rules in the code regarding self-dealing or prohibited transactions (i.e. Section 1372 of the Internal Revenue Code requires that 2% or greater shareholders be treated as partners in a partnership for this purpose, making them self-employed individuals instead of employees).

Thus, for purposes of this article and the advice we are giving our clients, until we see definitive guidance and a stance from the IRC on the issue of payroll for owners of an S-Corporation owning 50% or more of the entity, we would not claim the ERTC on their wages.

https://www.entrepreneur.com/article/364519

If I am an S corporation owner, may I claim the ERC for my own wages?
The answer is that it depends on the percentage of ownership and whether the owners are related parties. Owners with greater than 50% ownership in a corporation, either directly or by attribution, may not claim the credit for their own wages. Owners who are unrelated may claim the credit against their own wages if they hold 50% or less ownership in the company.

Example: A husband and wife own an S corporation with an unrelated shareholder, and all hold the same number of shares individually. Attribution rules would apply to the husband and wife, giving them a total of 66% ownership and making their wages ineligible for the credit. The unrelated shareholder’s wages would still be eligible to generate the credit, as that person is only a 33% owner in the business.

https://www.claconnect.com/resources/articles/2021/very-frequently-asked-questions-about-expanded-employee-retention-credit

[cgr]

@TBD If we want to add more confusion to the mix:
https://molentax.com/payroll-tax-deferral-employee-retention-credit-s-corps/

Example 3. DEF Corporation is an S corporation that is 100 percent owned by a married couple. It has four employees: the two owners and two children of the owners. A government order partially suspended the business operations. Only the wages of the two owners qualify for the employee retention credit.

[TBD]

@TBD If we want to add more confusion to the mix:
https://molentax.com/payroll-tax-deferral-employee-retention-credit-s-corps/

Example 3. DEF Corporation is an S corporation that is 100 percent owned by a married couple. It has four employees: the two owners and two children of the owners. A government order partially suspended the business operations. Only the wages of the two owners qualify for the employee retention credit.

by Clark Boyd | Apr 30, 2020

[minkr]

I received funding for first draw PPP on 1/27/2021. I am an independent contractor and used my 2019 Schedule C to calculate loan amount. I do not currently have any of the eligible "forgiveness expenses." It appears I need the full 10.75 weeks to deplete my funds (as owner compensation) before I would possibly be eligible for second draw.

Unfortunately there are only 9 calendar weeks from the time I was funded until March 31st. Does anyone have any workaround or ideas how I can get a second draw?

Any leads would be appreciated. TYIA

[cgr]

I received funding for first draw PPP on 1/27/2021. I am an independent contractor and used my 2019 Schedule C to calculate loan amount. I do not currently have any of the eligible "forgiveness expenses." It appears I need the full 10.75 weeks to deplete my funds (as owner compensation) before I would possibly be eligible for second draw.

Unfortunately there are only 9 calendar weeks from the time I was funded until March 31st. Does anyone have any workaround or ideas how I can get a second draw?

Any leads would be appreciated. TYIA

March 31 is the final day to get an etran #. It's possible you can still get funded a week after.