Author Topic: SBA PPP and EIDL Small Business Loans (some money is forgivable)  (Read 535560 times)

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3200 on: February 11, 2021, 08:21:40 PM »
by Clark Boyd | Apr 30, 2020
The rules for this haven't changed.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3201 on: February 11, 2021, 08:26:23 PM »
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
I'm not sure its workable but maybe.... accepting critic.

By law a self employed person can hire his children to do for him work without having to pay any FICA tax on it. Maybe you can spend it by hiring your children to do work for you, like mailing, cleaning, etc and it would be considered payroll, you should be able to apply for PPP2.

Anyone considering it speak to an accountant as it has to be done in the right way

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3202 on: February 11, 2021, 08:28:14 PM »
The rules for this haven't changed.
But how you understand the rules could change :-*

Offline 123-Rosh

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3203 on: February 11, 2021, 08:34:04 PM »
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

Hire your wife to be your secretary and put her on payroll.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3204 on: February 11, 2021, 08:36:15 PM »
Hire your wife to be your secretary and put her on payroll.
And paying accountant to set up a payroll account

Offline minkr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3205 on: February 11, 2021, 08:40:06 PM »
Thank you all for some of your ideas. Apparently I misunderstood, but I thought when applying based on schedule C, it has nothing to do with "current payroll/earnings" and purely based on the weekly average from my 2019 schedule C. I can "add" to my weekly payroll now, in addition to my owner compensation rate based on 2019 schedule C?

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3206 on: February 11, 2021, 08:41:25 PM »
Thank you all for some of your ideas. Apparently I misunderstood, but I thought when applying based on schedule C, it has nothing to do with "current payroll/earnings" and purely based on the weekly average from my 2019 schedule C. I can "add" to my weekly payroll now, in addition to my owner compensation rate based on 2019 schedule C?
Forgiveness for yourself is limited to that, but you can always hire employees to expand your options.

Offline minkr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3207 on: February 11, 2021, 08:42:33 PM »
March 31 is the final day to get an etran #. It's possible you can still get funded a week after.

The full 10.75 weeks would take me until April 12th... probably won't be funded that late even if I get in on the last possible day... unless I'm wrong!

Can I apply, hope and pray I won't get funded until April 12th, and if I'm funded sooner, just return the loan?

Offline minkr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3208 on: February 11, 2021, 08:47:00 PM »
Forgiveness for yourself is limited to that, but you can always hire employees to expand your options.
Interesting. Thanks for all of this info.
Am I correct that even if my IC business is earning way less right now than it was in 2019, I can still use my full owner compensation rate based on 2019, and then add an additional employee now to bundle on top of that? Also wouldn't it need to be a W2 employee to count for ppp forgiveness? I thought IC can't hire a W2 employee (legally need to be a corporation??)

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3209 on: February 11, 2021, 08:48:40 PM »
Interesting. Thanks for all of this info.
Am I correct that even if my IC business is earning way less right now than it was in 2019, I can still use my full owner compensation rate based on 2019, and then add an additional employee now to bundle on top of that? Also wouldn't it need to be a W2 employee to count for payroll forgiveness? I thought IC can't hire a W2 employee (legally need to be a corporation??)
Your owner compensation and forgiveness is based on what you used to apply (in your case 2019) and not based on current earnings.
A sole prop can have W2 employees as long as they have an EIN #.

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3210 on: February 11, 2021, 08:50:10 PM »
The full 10.75 weeks would take me until April 12th... probably won't be funded that late even if I get in on the last possible day... unless I'm wrong!

Can I apply, hope and pray I won't get funded until April 12th, and if I'm funded sooner, just return the loan?
I don't suggest you sign the final funding agreement til a day before you're eligible- that way your funding won't come through early. I guess we'll find out around that time til banks will fund...
Another thing to hope for is a program extension.

Offline minkr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3211 on: February 11, 2021, 09:17:44 PM »
Your owner compensation and forgiveness is based on what you used to apply (in your case 2019) and not based on current earnings.
A sole prop can have W2 employees as long as they have an EIN #.
If I applied for the loan using my SSN#, as that's what was on my tax return, is it too late to apply for an EIN#, use that to pay an employee, and use that for eligible forgiveness? if it's a new EIN# not on my original application?

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3212 on: February 11, 2021, 09:19:57 PM »
If I applied for the loan using my SSN#, as that's what was on my tax return, is it too late to apply for an EIN#, use that to pay an employee, and use that for eligible forgiveness? if it's a new EIN# not on my original application?
I'm not sure its workable but maybe.... accepting critic.

By law a self employed person can hire his children to do for him work without having to pay any FICA tax on it. Maybe you can spend it by hiring your children to do work for you, like mailing, cleaning, etc and it would be considered payroll, you should be able to apply for PPP2.

Anyone considering it speak to an accountant as it has to be done in the right way
With this solution you don't need EIN

Offline minkr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3213 on: February 11, 2021, 09:23:36 PM »
I don't suggest you sign the final funding agreement til a day before you're eligible- that way your funding won't come through early. I guess we'll find out around that time til banks will fund...
Another thing to hope for is a program extension.
Am I correct that using owner compensation alone would take exactly 76 days to deplete (10 weeks, 6 days). And if it shows on my loan that it was funded on 1/27, but it only hit my bank account on 1/28, can I go by 1/27? Every day could make the difference!

Offline minkr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3214 on: February 11, 2021, 09:25:12 PM »
With this solution you don't need EIN
Thank you, I will look into that. Except my oldest child is 6 years old  ;)

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3215 on: February 12, 2021, 12:26:23 AM »
I'm not sure its workable but maybe.... accepting critic.

By law a self employed person can hire his children to do for him work without having to pay any FICA tax on it. Maybe you can spend it by hiring your children to do work for you, like mailing, cleaning, etc and it would be considered payroll, you should be able to apply for PPP2.

Anyone considering it speak to an accountant as it has to be done in the right way
https://www.irs.gov/businesses/small-businesses-self-employed/family-help
https://www.henssler.com/big-tax-breaks-for-hiring-your-children-in-the-family-business/

Offline 1chulent

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3216 on: February 12, 2021, 07:12:15 AM »
What is the link to search who received PPP?
I saw on this thread but cant find it now.  (I only found for 150K+)

Offline cholent

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3217 on: February 12, 2021, 07:34:58 AM »
What is the link to search who received PPP?
I saw on this thread but cant find it now.  (I only found for 150K+)
Searchppp.com
Don't ask stupid questions and you won't get stupid answers

Offline Moishy123

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Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3219 on: February 14, 2021, 01:37:13 PM »
Or post the date your EIDL "GRANT" was deposited in your bank account
June 17 2020