Author Topic: SBA PPP and EIDL Small Business Loans (some money is forgivable)  (Read 535714 times)

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1120 on: May 15, 2020, 03:51:39 PM »
FTFY.

On what day did you apply? What was your app number?
SBA Approval on April 28

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1121 on: May 15, 2020, 06:25:35 PM »
Just received now email from Dime banker that underwriting approved the loan. Should receive email from funding dept in next couple of days

No loan docs? Since you signed those already?

What happens if you want the money but refuse to open a Dime account?
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Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1122 on: May 15, 2020, 06:44:34 PM »
No loan docs? Since you signed those already?

What happens if you want the money but refuse to open a Dime account?
Opened already account, now waiting to receive the loan docs.
Whats the matter to open up the account? you can than transfer out the whole money to any other account and close the Dime account

Offline Mordyk

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1124 on: May 16, 2020, 10:39:14 PM »
https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/sba-and-treasury-release-paycheck-protection-program-loan-forgiveness-application

Preliminary Notes:

The SBA is using the term "paid or incurred". Does that mean either one will do? Can I pay 6 months of payroll now and get 100% forgiven instead of worrying about the 75% threshold and submitting mortgage and utility docs?

Looks like owners can only enter 8/52 of 2019 Schedule C and cannot add any other payroll benefits. Based on the calculation that means that their forgiveness will be reduced as they don't meet the 74% threshold.

Looks like FTE's is actually FTE equivalent, so 2 PT employees will count as 1 FT. Pity if anyone didn't include them in their original payroll calculation to obtain the loan.

Offline beeweegee

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1125 on: May 16, 2020, 10:44:57 PM »
Preliminary Notes:

The SBA is using the term "paid or incurred". Does that mean either one will do? Can I pay 6 months of payroll now and get 100% forgiven instead of worrying about the 75% threshold and submitting mortgage and utility docs?

Looks like owners can only enter 8/52 of 2019 Schedule C and cannot add any other payroll benefits. Based on the calculation that means that their forgiveness will be reduced as they don't meet the 74% threshold.

Looks like FTE's is actually FTE equivalent, so 2 PT employees will count as 1 FT. Pity if anyone didn't include them in their original payroll calculation to obtain the loan.
What would this mean practically if there are no additional covered expenses and all they have as qualified expenses is their 8/52 (self) payroll?

Offline YesThatsMe

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1126 on: May 16, 2020, 10:53:21 PM »
What happens if the Draft Schedule C end up being very different than your final Schedule C?

Offline TBD

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Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1128 on: May 16, 2020, 11:44:41 PM »
What happens if the Draft Schedule C end up being very different than your final Schedule C?
The   tax documents I have submitted to the Lender are consistent with those the Borrower has submitted/will submit to the IRS and/or state tax or workforce agency.  I also understand, acknowledge, and agree that the Lender can share the tax information with SBA’s authorized representatives, including authorized representatives of the SBA Office of Inspector General, for the purpose of ensuring compliance with PPP requirements and all SBA reviews.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1129 on: May 16, 2020, 11:54:52 PM »
https://www.withum.com/resources/sba-issues-ppp-loan-forgiveness-application/

ii. The certifications in the application limit forgiveness on compensation for owner-employees, self-employed, and general partners to eight-weeks’ worth of 2019 compensation, and caps the amount at $15,385

a. This limits the ability to pay amounts in excess of 2019 compensation, including any hazard pay or bonus pay
b. This implies that hazard pay, bonus pay, and amounts in excess of 2019 compensation can be provided to other persons, such as employees


7. There is no reduction in forgiveness if the borrower fails to spend at least 75% of loan amount on payroll costs




Wage Reduction Rule
9. The application requires the base period for this calculation to be the first three months of 2020, i.e., from January 1, 2020 through March 31, 2020.


15. FTE Reduction Exceptions – FTE reductions during the CP (or APCP) will not reduce loan forgiveness if they result from any of the following: (i) the employee was fired for cause, (ii) the employee voluntarily resigned, or (iii) the employee voluntarily requested and received a reduction in their hours. This favorable rule can be viewed as an expansion of the exception in FAQ #40 for employees that were laid-off and refused to return to work.


16. The FTE Reduction Safe Harbor takes a snapshot approach to the rehire exemption. It looks to the borrower’s total FTE count as of June 30, 2020, and there is no requirement that any compensation be paid or incurred prior to June 30, and there is no requirement that the employee be retained for any period of time after June 30, though we expect substance over form will be applied on any subsequent audit.
« Last Edit: May 17, 2020, 12:00:49 AM by thebudgetdeals »

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1130 on: May 17, 2020, 12:00:52 AM »
What would this mean practically if there are no additional covered expenses and all they have as qualified expenses is their 8/52 (self) payroll?

Nothing because they'd need to return the remaining 26% regardless...
I was wondering about those who do have 25% to spend on other expenses. @thebudgetdeals based on your post looks like they would not have a reduction in forgiveness, but wondering as to why they chose to interpret that way when the SBA hasn't mentioned it. Also wondering if the 25% cap remains, or if they can use 26% on other expenses.

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1131 on: May 17, 2020, 12:20:50 AM »
https://www.sba.gov/sites/default/files/2020-05/3245-0407%20SBA%20Form%203508%20PPP%20Forgiveness%20Application.pdf
An eligible nonpayroll cost must be paid during the Covered Period or incurred during the Covered Period and paid on or before the next regular billing date, even if the billing date is after the Covered Period.

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1132 on: May 17, 2020, 12:22:29 AM »
https://www.sba.gov/sites/default/files/2020-05/3245-0407%20SBA%20Form%203508%20PPP%20Forgiveness%20Application.pdf
Payroll costs incurred but not paid during the Borrower’s last pay period of the Covered Period (or Alternative Payroll Covered Period) are eligible for forgiveness if paid on or before the next regular payroll date.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1133 on: May 17, 2020, 12:33:02 AM »
Preliminary Notes:



Looks like owners can only enter 8/52 of 2019 Schedule C and cannot add any other payroll benefits. Based on the calculation that means that their forgiveness will be reduced as they don't meet the 74% threshold.



Its only 74% from the loan amount but there is no reduction in their average payroll amount, If a SE earned $100,000 in 2019, received a loan for $20,000 his average weekly wage in 2019 was $1923, he can apply for forgiveness for $15,385 as its 100% of his average weekly payroll, however it will only be 73.85% of the loan amount

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1134 on: May 17, 2020, 12:35:57 AM »
It seems that if you had the same employee count on April 26 as Feb 15, Than even if you fired employees after that it wont effect the forgiveness amount, but you will still need to spend the loan on eligible costs

Offline beeweegee

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1135 on: May 17, 2020, 01:03:23 AM »
Nothing because they'd need to return the remaining 26% regardless...
I was wondering about those who do have 25% to spend on other expenses. @thebudgetdeals based on your post looks like they would not have a reduction in forgiveness, but wondering as to why they chose to interpret that way when the SBA hasn't mentioned it. Also wondering if the 25% cap remains, or if they can use 26% on other expenses.
But can they even have the 74% forgiven? Isn't 75% on payroll the minimum to get any forgiveness?

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1136 on: May 17, 2020, 01:19:20 AM »
https://www.dime.com/grants

Up to $200k? At $3k-$10k per grant that's at most 66 recipients. Am I misreading this wrong?
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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1137 on: May 17, 2020, 01:23:59 AM »
But can they even have the 74% forgiven? Isn't 75% on payroll the minimum to get any forgiveness?
No. Payroll is forgiven even below the 75% threshold- the other 25% of eligible expenses get reduced if you don't spend 75% on payroll.

Offline Hjay

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1138 on: May 17, 2020, 08:18:56 AM »
Anybody have any good ideas where to park the 25% I won’t be receiving forgiveness on?

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1139 on: May 17, 2020, 12:33:44 PM »
https://www.forbes.com/sites/anthonynitti/2020/05/16/sba-releases-paycheck-protection-program-loan-forgiveness-application-a-deep-dive/#60860a51b2f5

What is not clear is how strict the “any pay period” limits are applied: what if an employer was paid a salary of $80,000 in 2019, but received a bonus of $5,000 during one two-week pay period. Isn’t the annualized salary for that two week period in excess of $100,000, even though the employee only received total compensation of $85,000?