Author Topic: SBA PPP and EIDL Small Business Loans (some money is forgivable)  (Read 216337 times)

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1560 on: June 08, 2020, 08:36:20 PM »
Good news from the SBA:
https://home.treasury.gov/news/press-releases/sm1026

If less than 60% is used towards payroll, the forgiveness amount will be reduced so that 60% of the forgiveness funds are used towards payroll. Means no cliff, just reduction in forgiveness.
In addition, the new rules will confirm that June 30, 2020, remains the last date on which a PPP loan application can be approved.
NOT DEC 31 2020

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1561 on: June 08, 2020, 08:38:55 PM »
In addition, the new rules will confirm that June 30, 2020, remains the last date on which a PPP loan application can be approved.
NOT DEC 31 2020

Was there ever any confusion on that (other than the Senate not wanting to sign because of verbiage)?

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1562 on: June 08, 2020, 08:40:03 PM »
https://www.federalreserve.gov/newsevents/pressreleases/monetary20200608a.htm

Glad we're finally seeing some action on that program. My understanding is that they're supposed to roll it out before the end of June so they're cutting it close if they haven't started signing lenders on yet.

Offline shiframeir

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1563 on: June 08, 2020, 09:41:21 PM »
Has anyone seen guidance for companies that sell a part of their business (so some employees leave to a new business, but aren't really laid off)? Question is if those negatively affect the FTE calculation to reduce forgiveness.

Offline avrumy

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1564 on: June 09, 2020, 05:01:54 PM »
When applying for the PPP loan- do i put in partnership name and EIN number or personal name and social? if partnership name- is it a problem if both partners each apply using the same EIN? ty

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1565 on: June 09, 2020, 05:21:56 PM »
When applying for the PPP loan- do i put in partnership name and EIN number or personal name and social? if partnership name- is it a problem if both partners each apply using the same EIN? ty

You must both apply together as one entity.

This link should help with details:
https://bench.co/blog/operations/ppp-for-partnerships/

Offline avrumy

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1566 on: June 09, 2020, 06:39:54 PM »
You must both apply together as one entity.

This link should help with details:
https://bench.co/blog/operations/ppp-for-partnerships/
ty, appreciate it.

Offline Ygold

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1567 on: June 09, 2020, 07:45:24 PM »
Can any business apply for a PPP Loan, or is there some criteria?
Is an amazon sole proprietor LLC eligible for a PPP loan?
Shout out to Meshugener!

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1568 on: June 09, 2020, 08:07:48 PM »
Can any business apply for a PPP Loan, or is there some criteria?
Is an amazon sole proprietor LLC eligible for a PPP loan?

If you have less than 500 employees you can apply. If you applied for a different business that you also own there are some additional rules to loan/forgiveness.

No payroll:
A sole prop can apply using a filed or draft 2019 Schedule C. Your loan amount will be line 31 divided by 12 times 2.5.
You'll get 8/52 (capped at $15,385) forgiven as "payroll".
You can use the remaining ~26% on rent/mortgage interest/utilities if it was deducted on your 2019 Schedule C.

Payroll:
The above for yourself plus wages and benefits paid to employees. Exact details discussed upthread.

Offline AsherO

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1569 on: June 09, 2020, 10:14:53 PM »
If you have less than 500 employees you can apply. If you applied for a different business that you also own there are some additional rules to loan/forgiveness.

Can you please link to additional loan/forgiveness rules for applying for a second business. Thanks!

Offline Geshmak25

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1570 on: June 09, 2020, 10:39:46 PM »
I applied for PPP via bluevine on motz shab. This is my status when I log in:

Your offer
Great news — your loan application has been authorized by the SBA. Due to recent changes in the Paycheck Protection Program our bank is making some changes to give you more time to qualify for loan forgiveness and also have a longer repayment period. We will let you know when you can come back to sign your loan note. While these beneficial changes are pending, the bank will be unable to fund your loan. We expect these updates to take a few days.Questions? Contact us at cares@bluevine.com or call 1 (888) 216-9619
PUTPAC = PITA

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1571 on: June 09, 2020, 10:41:57 PM »
Can you please link to additional loan/forgiveness rules for applying for a second business. Thanks!

On the loan end:
https://www.nav.com/blog/can-i-apply-for-eidl-or-ppp-for-multiple-businesses-599338/
Basically you can't exceed 500 employees or the max loan across all your companies.

On the forgiveness end:
See Section 3(c)
https://home.treasury.gov/system/files/136/PPP-IFR-Loan-Forgiveness.pdf
The 8/52 limit of 2019 compensation with a maximum of $100,000 for owner-employees, self-employed individuals, and general partners applies to the individual across all businesses.
In other words if your loan amount is $25,642 (15,385=60%, 10,257=40%) or more on one entity, there's no point in getting another loan because you'll get 0% forgiven as 0% can be spent towards payroll. If you got a smaller loan it's worth it to apply as you can receive a total of 15,385 in owner comp across all loans, and that only has to account for 60% leaving you to use the rest for other allowable expenses.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1572 on: June 09, 2020, 11:16:05 PM »
On the loan end:
https://www.nav.com/blog/can-i-apply-for-eidl-or-ppp-for-multiple-businesses-599338/
Basically you can't exceed 500 employees or the max loan across all your companies.

On the forgiveness end:
See Section 3(c)
https://home.treasury.gov/system/files/136/PPP-IFR-Loan-Forgiveness.pdf
The 8/52 limit of 2019 compensation with a maximum of $100,000 for owner-employees, self-employed individuals, and general partners applies to the individual across all businesses.
In other words if your loan amount is $25,642 (15,385=60%, 10,257=40%) or more on one entity, there's no point in getting another loan because you'll get 0% forgiven as 0% can be spent towards payroll. If you got a smaller loan it's worth it to apply as you can receive a total of 15,385 in owner comp across all loans, and that only has to account for 60% leaving you to use the rest for other allowable expenses.
In my opinion anyone who can apply should apply even if under current rules they are not eligible for forgiveness, it is very possible they will tweak again the rules.
As it seems under current rules >95% of the loans will be forgiven, I wouldn't be surprised if they will waive one day the forgiveness application completely. Why make crazy all the banks and millions of small business with the application if you anyway expect all the money to be forgiven,
Therefore take the risk of paying 1% interest vs the small but possible chance that you will be able to keep the money.

Offline AsherO

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1573 on: June 09, 2020, 11:33:35 PM »
In other words if your loan amount is $25,642 (15,385=60%, 10,257=40%) or more on one entity, there's no point in getting another loan because you'll get 0% forgiven as 0% can be spent towards payroll.

Thanks, very helpful.

Some people might prefer a 2 (now 5) year loan at 1% even if there’s no forgiveness...

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1574 on: June 09, 2020, 11:43:50 PM »

In other words if your loan amount is $25,642 (15,385=60%, 10,257=40%) or more on one entity, there's no point in getting another loan because you'll get 0% forgiven as 0% can be spent towards payroll. If you got a smaller loan it's worth it to apply as you can receive a total of 15,385 in owner comp across all loans, and that only has to account for 60% leaving you to use the rest for other allowable expenses.
Except if your hire a new employee.... as discussed upthread

Offline yitz1000

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1575 on: June 10, 2020, 10:45:18 AM »
Based on the new guidelines released, can employees be laid off now to collect partial unemployment since the FTE count can be looked at later?

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1576 on: June 10, 2020, 10:58:44 AM »
Based on the new guidelines released, can employees be laid off now to collect partial unemployment since the FTE count can be looked at later?

There's also the salary reduction rule to keep in mind.

On the original forgiveness application it looks at wage rates for each employee from January 1 through March 31, 2020 and compares it to the wage rate during the 8 week covered period to determine if salary levels were maintained and not reduced by more than 25%. This only applies to employees with an annualized salary of less than $100,000.

There was an additional safe harbor in place if the borrower can return wage levels by June 30, 2020 to the level it was as of February 15, 2020 the forgiveness will not be reduced.

My understanding is that everything with the date of June 30, 2020 on the forgiveness application can now be replaced by December 31, 2020, although we've yet to see anything from the SBA directly and how they are deciding to interpret the new laws.

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1577 on: June 10, 2020, 11:03:39 AM »
Found this forgiveness calculator online- no idea how accurate it is.
https://coastapp.com/ppp-forgiveness/

Offline jackofall

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1578 on: June 10, 2020, 11:46:23 AM »
Amazing what Cross River did. 4th highest amount of loans in the country! Wow!!
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Offline AsherO

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #1579 on: June 10, 2020, 12:41:13 PM »
Amazing what Cross River did. 4th highest amount of loans in the country! Wow!!

Cross River found the business and is the bank of record, Kabbage seems to have done most (all?) of the processing work.