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

[jackofall]

Nice! So from processing until disbursement can be a day or two?
Or do you mean from signing?

Thanks !

From approval 2-3 days

[Yoel]

Anyone here get offered/accept an EIDL loan (not advance/grant)? I just got offered a loan and I'm not sure what it means. Anyone know more about this?

30 year term is nice, 3.75% not so much.

I also got this offer on friday.
I applied and it is processing. What are the chances of approval?

[LAX_Esq]

Anyone have a clue what "cash compensation" or "compensation" means for an S-corp "owner-employee," for the purposes of this "lesser of 8/52 compensation or $15,835"? The new SBA PDF ( https://home.treasury.gov/system/files/136/PPP-IFR-Loan-Forgiveness.pdf ) doesn't define that term.

I'm an S-corp "owner-employee," and paid myself a W-2 salary in 2019 of well under 100K, but with my draw, I'm over 100K all-in. Thus, 8/52 of my W-2 salary is well under the $15,835.
 
You'd think that "cash compensation" means all-in compensation whether payroll/W-2 or draws, given that the SBA PDF uses the term "payroll" when it seems to be talking about W-2 compensation only. But who knows.

[cgr]

Anyone have a clue what "cash compensation" or "compensation" means for an S-corp "owner-employee," for the purposes of this "lesser of 8/52 compensation or $15,835"? The new SBA PDF ( https://home.treasury.gov/system/files/136/PPP-IFR-Loan-Forgiveness.pdf ) doesn't define that term.

I'm an S-corp "owner-employee," and paid myself a W-2 salary in 2019 of well under 100K, but with my draw, I'm over 100K all-in. Thus, 8/52 of my W-2 salary is well under the $15,835.
 
You'd think that "cash compensation" means all-in compensation whether payroll/W-2 or draws, given that the SBA PDF uses the term "payroll" when it seems to be talking about W-2 compensation only. But who knows.

Per https://bench.co/blog/operations/owner-draws-ppp/

When it comes to the PPP, your payroll will be limited to the wages that you are taxed on. As an owner of a corporation, this should only be the amount you have paid yourself by running payroll. This will not be owner draws, distributions, or loans to shareholders, because none of those types of transactions are subject to payroll or self-employment tax.

If you are using a payroll provider, your salary will be included on an annual payroll report along with any W2 employees you may have. If you’ve been running payroll manually yourself or with the help of a CPA, so long as you have been remitting payroll taxes, you can use those salaries in your calculation to apply for the PPP.

Per https://www.nav.com/blog/does-an-owner-draw-count-as-salary-for-the-paycheck-protection-program-ppp-606284/

Conspicuously absent from this guidance is any instruction for S Corporation owners who pay themselves from owner’s draw or distributions. The SBA Administrator and Treasury have not released official guidance on whether owner’s draw counts toward the payroll calculation for purposes of qualifying for PPP. But an email from the SBA dated April 6, 2020 states, “Only payroll costs in the form of salary, wages, tips, etc. are eligible for the PPP program. Owner draws, distributions, amounts recorded on a K-1 are not eligible for the PPP program.” An SBA webinar I recently attended stated the same information so it appears to be an official position of the SBA.

[A3]

I also got this offer on friday.
I applied and it is processing. What are the chances of approval?

From what I’ve seen, as long your Credit score is over 570 you should be good to go.
Of course as long as all information was legit. They may email a couple simple inquiries once it’s processed. Correspondence is pretty quick.


They are processing and emailing today as well.

[AsherO]

From what I’ve seen, as long your Credit score is over 570 you should be good to go.
Of course as long as all information was legit. They may email a couple simple inquiries once it’s processed. Correspondence is pretty quick.


They are processing and emailing today as well.

They apparently have dedicated loan officers.

[mgarfin]

owner-employees and self-employed on a new business that didn't file in 2019
How will they calculate max forgivable?

[LAX_Esq]

Per https://bench.co/blog/operations/owner-draws-ppp/

When it comes to the PPP, your payroll will be limited to the wages that you are taxed on. As an owner of a corporation, this should only be the amount you have paid yourself by running payroll. This will not be owner draws, distributions, or loans to shareholders, because none of those types of transactions are subject to payroll or self-employment tax.

If you are using a payroll provider, your salary will be included on an annual payroll report along with any W2 employees you may have. If you’ve been running payroll manually yourself or with the help of a CPA, so long as you have been remitting payroll taxes, you can use those salaries in your calculation to apply for the PPP.

Per https://www.nav.com/blog/does-an-owner-draw-count-as-salary-for-the-paycheck-protection-program-ppp-606284/

Conspicuously absent from this guidance is any instruction for S Corporation owners who pay themselves from owner’s draw or distributions. The SBA Administrator and Treasury have not released official guidance on whether owner’s draw counts toward the payroll calculation for purposes of qualifying for PPP. But an email from the SBA dated April 6, 2020 states, “Only payroll costs in the form of salary, wages, tips, etc. are eligible for the PPP program. Owner draws, distributions, amounts recorded on a K-1 are not eligible for the PPP program.” An SBA webinar I recently attended stated the same information so it appears to be an official position of the SBA.

All of this is discussing the application side, and it doesn't seem like any of this necessarily applies to the forgiveness side.

[cgr]

owner-employees and self-employed on a new business that didn't file in 2019
How will they calculate max forgivable?

No update yet.

This is till an outstanding issue for new 2020 businesses as well. What's owner comp forgiveness?

Per https://www.govinfo.gov/content/pkg/FR-2020-04-20/pdf/2020-08257.pdf it says that: SBA will issue additional guidance for those individuals with self-employment income who: (i) Were not in operation in 2019 but who were in operation on February 15, 2020, and (ii) will file a Form 1040 Schedule C for 2020.

I reached to the SBA after the forgiveness application was released to get clarity and was told by the rep that since she doesn't have an answer, her manager will call me back. That was Sunday so still waiting.

[cgr]

All of this is discussing the application side, and it doesn't seem like any of this necessarily applies to the forgiveness side.

Correct. The understanding is that it would be the same, but again as long as nothing has been released by the SBA on this specifically, nothing is certain.

[AsherO]

Pretty quick turnaround time. Same biz day or next. Funding next day after signing loan docs. Thanks.

From approval 2-3 days

@jackofall what exactly do you call “approval”? Did you experience any underwriting/questions/documentation requests?

[A3]

@jackofall what exactly do you call “approval”? Did you experience any underwriting/questions/documentation requests?

Today I received three emails from a loan officer.
They were simple inquiries and no documents were requested.

No requests for any documentation. After the third email I got the approval email about 20 min later.

Approval is the option to sign the loan docs.

Reddit EIDL is great as well. (Is this a competing site?)

[TBD]

https://www.sba.gov/sites/default/files/2020-05/PPP_Report_Net_200518_0.pdf
https://www.sba.gov/sites/default/files/2020-05/PPP__200523.pdf

WOW. PPP NET FUNDING AMOUNT WAS LOWER THIS WEEK THAN A WEEK AGO, #SAFEHARBOR


https://www.sba.gov/sites/default/files/2020-05/EIDL%20COVID-19%20Loan%205.23.2020.pdf

[AsherO]

https://www.sba.gov/sites/default/files/2020-05/PPP_Report_Net_200518_0.pdf
https://www.sba.gov/sites/default/files/2020-05/PPP__200523.pdf

WOW. PPP NET FUNDING AMOUNT WAS LOWER THIS WEEK THAN A WEEK AGO, #SAFEHARBOR


https://www.sba.gov/sites/default/files/2020-05/EIDL%20COVID-19%20Loan%205.23.2020.pdf

All you need is a few corporations returning 5 million, and you can fund hundreds of small businesses.

[TBD]

https://www.withum.com/resources/sba-kicks-off-mdw-with-further-loan-forgiveness-guidance/?utm_source=marketo&utm_medium=email&utm_campaign=sba%20insight&utm_content=&utm_term=&mkt_tok=eyJpIjoiTlRsak9UUXhNbUl5T1RNNSIsInQiOiJkUTJGWGU2VGtzZEVpVmF4WklKUlE1akpNeG5idXNrVG15OHlPall1TmFEUHVnWmIyNGwyOWgwXC91R09ZbU1xNFhjVE5hdUpNOE8rXC9yREplTjJ6QWd0RUV4a21KdVRJdmlKdnNxb21CVkFHSm9mdUUyaDd0WERRazVVcWUxSDJTIn0%3D

Reaffirms opportunity for an alternative payroll covered period, only for borrowers who have a bi-weekly, or more frequent, payroll cycle.

[AsherO]

Today I received three emails from a loan officer.
They were simple inquiries and no documents were requested.

No requests for any documentation. After the third email I got the approval email about 20 min later.

Approval is the option to sign the loan docs.

Reddit EIDL is great as well. (Is this a competing site?)

Nice. Once they issue loan docs, are the funds held for you? How long do you to return the signed docs?

I’m wondering how long I can defer signing the docs and starting my loan term.

[jackofall]

@jackofall what exactly do you call “approval”? Did you experience any underwriting/questions/documentation requests?

None. No questions asked. Just had to sign Loan docs.

[AsherO]

Thanks @A3 and @jackofall

[Buruch]

Sorry if this was already answered. Is there any additional benefit for new apps for EIDL in addition to ppp loan forgiveness?

[sillypainter]

Nice. Once they issue loan docs, are the funds held for you? How long do you to return the signed docs?

I’m wondering how long I can defer signing the docs and starting my loan term.

Don't help by not signing, because the loan starts on he date of the note, same with the 12 month forbearance. You could however wait to identify yourself so there is no note generated, but this may take away your ability to get the loan if they run out of funds for example.

I got the loan docs and note on Friday, I guess by Tuesday I will be funded that's the DP I'm hearing fro. Everybody, I did not get an email or inquiry, Zero.