Author Topic: SBA PPP and EIDL Small Business Loans (some money is forgivable)  (Read 536133 times)

Offline Dan

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #880 on: May 06, 2020, 12:49:29 AM »
EIDL IS BACK UP!!!!!!!!!!!!!!!!!!!!


https://covid19relief.sba.gov/#/

@Dan I thing it deserves a DDMS post.
Open to everyone?
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #881 on: May 06, 2020, 01:17:32 AM »
Open to everyone?
Application goes through for everyone. some mentioned up-thread that they are first processing Agri but...

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #882 on: May 06, 2020, 01:33:43 AM »
As mentioned already above the EIDL advance amount is being reduced from the PPP forgiveness amount, so if you received already PPP than think over if there is a reason to apply for EIDL advance part.

Offline Hjay

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #883 on: May 06, 2020, 07:58:57 AM »
Got approval email overnight from kabbage.

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #884 on: May 06, 2020, 09:36:58 AM »
Yesterday I called in to check what was going on after having the above for a few days. Rep said she'll forward file to supervisor. A few min later I had my loan docs, and a few min after signing they updated account to note that they disbursed the funds to the account selected.
Now this morning when I log in there's a new error, There was an error processing your documents, and that I should call them. Phones have been busy all morning.

Wondering if it's a legit error or if it's something like this:
Anyone else receiving this error?

Looks like this was another temporary or internal error. Cleared up and funds were released. Go figure...

Offline yossisch1

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #885 on: May 06, 2020, 09:46:21 AM »
I just got an email from Kabbage that I was approved.  I want to open a bank account for the funds to go there. 
1)Where can I open a business account online?
2) Can I wait to sign the docs or I am risking funds being exhausted?
Bump

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #886 on: May 06, 2020, 10:47:56 AM »
A) the same thing meaning the same expense. (Example: Your rent is 1k. You can't tell PPP you used 1k for rent, and then tell EIDL you used their 1k for rent.)

B) Your PPP loan amount stays the same. When it comes to forgiveness they'll take Total PPP (20k) Minus Total EIDL Grant (2k)= PPP Forgiveness (18k). That leaves you with a loan balance of 2k, which is the amount you already got from EIDL.

Again, what they're saying is you're only eligible to get the total of your PPP forgiveness from the SBA. If you took some from our EIDL grant bucket, you'll need to make up the difference by deducting from your forgiveness.
If I'm not being clear maybe someone with better communication skills can chime in?

@Shua I've been doing some more research on this and to clarify only the grant is deducted from the total PPP forgiveness.
If you received an actual EIDL loan (I haven't personally heard of anyone getting to that step yet) then it has to be rolled into your PPP.

See link below for more info
https://bench.co/blog/operations/ppp-eidl-together/

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #887 on: May 06, 2020, 11:00:55 AM »
Quote from: Quote from: Roth&Co email
Please read if you have received PPP funds but suspect you may not be eligible.

The CARES Act provided relief through the Payroll Protection Program (“PPP”) loans to small businesses meeting certain conditions. These much-needed loans were a great relief to business owners who clamored to receive funding. The CARES Act states that the loan must be “necessary to support the on-going operations of the applicant”. Unfortunately, the term “necessary” was left vague and unexplained. Until now, borrowers were able to self-assess their need for the PPP loans, but the SBA continuously issued announced new clarifications and guidelines. As a result of further guidelines imposed by the Small Business Administration, a business was eligible for PPP if there is economic uncertainty and the loan was necessary to support the business’ ongoing operations, taking into account its current business activity and its ability to access other sources of liquidity.

The SBA also stated that it will audit businesses with loan amounts in excess of $2 million, as well as random audits for other small businesses. If an employer is found to have taken a loan that wasn’t necessary, the funds may have to be returned and the applicant may face criminal penalties or imprisonment. The SBA decided to provide a grace period, until May 7th, for ineligible businesses to return loans as part of a safe harbor amnesty program.

If you have any concerns regarding your eligibility of PPP or if you would like to conduct a study to assess your certification and whether the PPP loan was necessary for your business, please feel free to reach out to your partner or our advisory team at advisory@rothcocpa.com.

Deadline extended to May 14.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #888 on: May 06, 2020, 11:16:26 AM »
@Shua I've been doing some more research on this and to clarify only the grant is deducted from the total PPP forgiveness.
If you received an actual EIDL loan (I haven't personally heard of anyone getting to that step yet) then it has to be rolled into your PPP.

See link below for more info
https://bench.co/blog/operations/ppp-eidl-together/
Only loans received till April 3 have to be rolled into PPP

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #889 on: May 06, 2020, 11:17:33 AM »
Wondering what will be for those who receive the EIDL advance after they applied already for the forgiveness on PPP

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #890 on: May 06, 2020, 11:20:17 AM »
Wondering what will be for those who receive the EIDL advance after they applied already for the forgiveness on PPP

Not sure that's possible. Isn't the EIDL grant program only until 6/30?
You apply for PPP forgiveness 8+ weeks after origination.

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #891 on: May 06, 2020, 11:25:07 AM »
Can an independent contractor who is approved for PPP and will use the finds to cover their paycheck go out and take a new salaried job during those 8 weeks? Any reason someone couldn't be "paid" for their lost 1099 work while simultaneously accepting a new paid position (entirely separate from their 1099 work that they are in fact missing out on...)?

And this question would also apply to additional NEW unrelated 1099 work...

Quote from: Roth&Co email
As a result of further guidelines imposed by the Small Business Administration, a business was eligible for PPP if there is economic uncertainty and the loan was necessary to support the business’ ongoing operations, taking into account its current business activity and its ability to access other sources of liquidity.

Perhaps this answers the question?
For me it raises some more... What if I had no income in the weeks leading up to PPP so I can legitimately certify the above, but in those 8 weeks business picks up? Does the fact that I lost a few weeks of income and need the cash infusion to keep going cover me? Or the fact that I'm earning in those 8 weeks make me ineligible even though I have a payroll gap (and what I earn in those 8 weeks would cover missed payroll and the PPP would cover the actual payroll of those 8 weeks)?

Offline LAX_Esq

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #892 on: May 06, 2020, 11:29:08 AM »
Forgiveness question. I'm a single-employee (myself) S-corp, and received $20,800 in funding (i.e., $100K / 12 = $8333 * 2.5).

If I just pay myself $20,800 in salary over the next 8 weeks, am I good to go? I've read various things about not paying any employee more than $8333/month (100K equivalent) being allowed for forgiveness. But I've also read backpay can be forgiven. So can I just pay myself 2.5 months of $8333/mo salary over the next 8 weeks?

Offline beeweegee

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #893 on: May 06, 2020, 11:45:49 AM »
Perhaps this answers the question?
For me it raises some more... What if I had no income in the weeks leading up to PPP so I can legitimately certify the above, but in those 8 weeks business picks up? Does the fact that I lost a few weeks of income and need the cash infusion to keep going cover me? Or the fact that I'm earning in those 8 weeks make me ineligible even though I have a payroll gap (and what I earn in those 8 weeks would cover missed payroll and the PPP would cover the actual payroll of those 8 weeks)?
My thoughts exactly... I don't want to do the wrong thing and take PPP if I'm not entitled to it due to a new salaried job, but I did miss many weeks and "double-dipping" during the 8 weeks is really just covering for missed weeks prior.

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #894 on: May 06, 2020, 11:59:01 AM »
Forgiveness question. I'm a single-employee (myself) S-corp, and received $20,800 in funding (i.e., $100K / 12 = $8333 * 2.5).

If I just pay myself $20,800 in salary over the next 8 weeks, am I good to go? I've read various things about not paying any employee more than $8333/month (100K equivalent) being allowed for forgiveness. But I've also read backpay can be forgiven. So can I just pay myself 2.5 months of $8333/mo salary over the next 8 weeks?

Got some details for you:

https://bench.co/blog/operations/ppp-loan-forgiveness/
You are entitled to use the PPP loan to replace lost compensation due to the impacts of COVID-19. However, you are not entitled to use the full amount to replace pay. Eight weeks worth of your 2019 net profit will be eligible for forgiveness.

If you have mortgage interest, rent, or utilities expenses, you must have claimed or be entitled to claim a deduction for those expenses on your 2019 Form 1040 Schedule C in order to claim them for forgiveness.


https://www.nav.com/blog/how-to-apply-for-forgiveness-for-your-paycheck-protection-program-loan-602036/
Owner compensation replacement, calculated based on 2019 net profit … with forgiveness of such amounts limited to eight weeks’ worth (8/52) of 2019 net profit
Payments of interest on mortgage obligations on real or personal property incurred before February 15, 2020, to the extent they are deductible on Form 1040 Schedule C (business mortgage payments);
Rent payments on lease agreements in force before February 15, 2020, to the extent they are deductible on Form 1040 Schedule C (business rent payments); and
Utility payments under service agreements dated before February 15, 2020 to the extent they are deductible on Form 1040 Schedule C (business utility payments).


Offline LAX_Esq

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #895 on: May 06, 2020, 12:05:19 PM »
#894 -- thanks, but neither link answers the question about $100K salary for an S-corp

The portion of the each link that you've quoted is about self-employed, not S-corps.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #896 on: May 06, 2020, 12:05:53 PM »
Not sure that's possible. Isn't the EIDL grant program only until 6/30?
You apply for PPP forgiveness 8+ weeks after origination.
some ppl were funded already PPP by mid April

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #897 on: May 06, 2020, 12:15:16 PM »
#894 -- thanks, but neither link answers the question about $100K salary for an S-corp

The portion of the each link that you've quoted is about self-employed, not S-corps.
How did you get paid in 2019? W-2?

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #898 on: May 06, 2020, 12:30:06 PM »
From my Dime banker...


Please lookout for an e-mail from Dime, the underwriters are moving very fast.

Offline LAX_Esq

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #899 on: May 06, 2020, 12:44:11 PM »
How did you get paid in 2019? W-2?

Yes, my corp pays me a W-2 salary -- and any profit is a distribution (K-1). Loan amount is based on the 2019 W-2's. Forgiveness and loan amount have different rules, as we all know.