Author Topic: SBA PPP and EIDL Small Business Loans (some money is forgivable)  (Read 535873 times)

Offline TBD

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Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3321 on: March 03, 2021, 03:13:54 PM »
@cgr
You don't need to use PPP1 for eligible "FORGIVNESS" expenses to be able to apply for PPP2

Question: If a borrower received partial forgiveness of its First Draw PPP Loan, does
this make the borrower ineligible for a Second Draw PPP Loan?
Answer: If a borrower received partial forgiveness of its First Draw PPP Loan, the
borrower is eligible for a Second Draw PPP Loan as long as the borrower used the full
amount of its First Draw PPP Loan only for eligible expenses outlined in subsection
B.11.a.i.-xi of the consolidated interim final rule implementing updates to the PPP.

as long as the borrower used the full amount of its First Draw PPP Loan only for eligible expenses
I believe this means that if the borrower has a forgiveness reduction on First Draw they can get Second Draw, but the funds itself must still have been used for eligible expenses to qualify for Second Draw.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3322 on: March 03, 2021, 03:15:54 PM »
as long as the borrower used the full amount of its First Draw PPP Loan only for eligible expenses
I believe this means that if the borrower has a forgiveness reduction on First Draw they can get Second Draw, but the funds itself must still have been used for eligible expenses to qualify for Second Draw.
Correct. But you can use payroll in 4 weeks instead of 8 weeks since its eligible expenses even if not forgivable and than apply for PPP2

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3323 on: March 03, 2021, 03:17:01 PM »
Correct. But you can use payroll in 4 weeks instead of 8 weeks since its eligible expenses even if not forgivable and than apply for PPP2
You can always do that for employees up to 1923/week.
Over that amount is not eligible expenses, and neither is owner compensation above what was previously earned.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3324 on: March 03, 2021, 03:17:10 PM »
To mitigate this risk, if a Schedule C filer elects to use gross income to
calculate its loan amount on a First Draw PPP Loan and the borrower reported more than
$150,000 in gross income on the Schedule C that was used to calculate the borrower’s loan
amount, the borrower will not automatically be deemed to have made the statutorily required
certification concerning the necessity of the loan request in good faith, and the borrower may
be subject to a review by SBA of its certification.8

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3325 on: March 03, 2021, 03:21:11 PM »
That’s a stretched inference if your only source is the text you quoted.
It's wrong. i deleted it

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3326 on: March 03, 2021, 03:21:31 PM »
That’s a stretched inference if your only source is the text you quoted.
Step 1: From your 2019 or 2020 IRS Form 1040, Schedule C, you may elect
to use either your line 31 net profit amount or your line 7 gross income
amount. (If you are using 2020 to calculate payroll costs and have not yet
filed a 2020 return, fill it out and compute the value.) If this amount is over
$100,000, reduce it to $100,000. If both your net profit and gross income are
zero or less, you are not eligible for a PPP loan

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3327 on: March 03, 2021, 03:31:25 PM »
To mitigate this risk, if a Schedule C filer elects to use gross income to
calculate its loan amount on a First Draw PPP Loan and the borrower reported more than
$150,000 in gross income on the Schedule C that was used to calculate the borrower’s loan
amount, the borrower will not automatically be deemed to have made the statutorily required
certification concerning the necessity of the loan request in good faith, and the borrower may
be subject to a review by SBA of its certification.8
I don't get it, when can you use more than $100,000?

Online AsherO

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3328 on: March 03, 2021, 03:34:33 PM »
I don't get it, when can you use more than $100,000?

I’m not sure. Maybe if you have other employees?
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Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3329 on: March 03, 2021, 03:36:19 PM »
I don't get it, when can you use more than $100,000?
I guess you can only use $100,000 but if your gross income is over $150,000 than you won't have the safe harbor.

On they application they ask you for Gross Income, but when you divide it to 12 months they are limiting it to $8,333 a month

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3330 on: March 03, 2021, 03:37:26 PM »
I don't get it, when can you use more than $100,000?
They're saying that if you use the gross income calculation and gross income is more than 150k (even though for the calculation it's capped at 100k), you lose out on the waiver that all loans under 2MM are considered to have made the economically necessary certification in good faith.

Offline shulemw

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3331 on: March 03, 2021, 04:02:16 PM »
I have a loan by cross river that got denied but they do not let me apply again. whats my options? @cgr

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3332 on: March 03, 2021, 04:29:56 PM »
I have a loan by cross river that got denied but they do not let me apply again. whats my options? @cgr
PM me.

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3333 on: March 03, 2021, 05:39:21 PM »
Anyone here an accountant or know rules of PPP?

I took payroll at the end of 2020 for the entire year, I am under the understanding that I should be able to divide it by 12 and times it by 2.5 and apply for PPP based on that. Is that true or false?

I have been denied by 2 places already for insufficient documents and one of them being BOA telling me I need to prove I was open on Feb 15, 2020 and I must submit payroll documents for that month even though none exist. Based on that they told me in short go fly a kite.

Anything to be done here?
Just got approval for a case like this, by providing just a Feb 2020 bank statement.
You can PM me.

Offline Abe100

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3334 on: March 04, 2021, 07:16:29 PM »
Can a condo association apply for an EIDL Loan?

1) Is it considered a real business, as the purpose of the HOA is just to collect and cover common charges
2) No single condo owns more then 20%, so if I can apply, who would I enter as the owner?

Offline hvaces42

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3335 on: March 04, 2021, 11:19:23 PM »
Got an email asking for 4506-T on my funded EIDL loan. Then all of a sudden it says targeted advance processing in my account  :o Never asked for anything.
Fair warning - Any PMs sent in response to forum posts are fair game for ridicule in public.

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3336 on: March 05, 2021, 07:09:40 AM »
Got an email asking for 4506-T on my funded EIDL loan. Then all of a sudden it says targeted advance processing in my account  :o Never asked for anything.
I'll gladly take it off your hands if your really, really don't want it...  ;)

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3337 on: March 05, 2021, 10:26:46 AM »
Can a condo association apply for an EIDL Loan?

1) Is it considered a real business, as the purpose of the HOA is just to collect and cover common charges
2) No single condo owns more then 20%, so if I can apply, who would I enter as the owner?

1) Most SBA experts believe that HOAs and COAs are PPP and EIDL eligible, as their work is more closely related to management and less to passive RE income.
2) For EIDL 81% of ownership needs to be accounted for on the application- you'll need to list several owners until you reach the 81% minimum.

Offline Abe100

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3338 on: March 05, 2021, 01:36:10 PM »
1) Most SBA experts believe that HOAs and COAs are PPP and EIDL eligible, as their work is more closely related to management and less to passive RE income.
2) For EIDL 81% of ownership needs to be accounted for on the application- you'll need to list several owners until you reach the 81% minimum.

I understand the point that it's not passive as rental RE. But I don't see why it's a business. It's organized as a corporation, but the goal is to cover common charges in a professional way. Not to turn a profit

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #3339 on: March 05, 2021, 01:42:10 PM »
I understand the point that it's not passive as rental RE. But I don't see why it's a business. It's organized as a corporation, but the goal is to cover common charges in a professional way. Not to turn a profit

Can a HOA/COA certify in good faith that they need the EIDL loan to support ongoing operations even if members have been paying their dues?
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