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

[cgr]

Looking for 5 volunteers to test my excel PPP forgiveness application.

Need a mix of businesses with owner comp only, owner comp + employees, as well as employees only. The more complicated your FTE/wage reduction situation the better.
If you're interested in participating email me at chaiplus1@gmail.com by Thursday- please do not PM me via DDF.
You'll be chosen based on your situation, not first come first serve.
If you don't hear back from me by Friday you have not been chosen to participate. Please don't follow up if you don't hear from me.

You can use the doc to test several scenarios to see how it increases or decreases your forgiveness amount. I'm doing this for the feedback (user friendliness and accuracy), not as a free giveaway to shore up popularity- please only participate if you're interested in communicating your thoughts.


Include in your email:
Loan Amount (Field will be locked and you will not be able to change at a later date)
Loan Date (Field will be locked and you will not be able to change at a later date)
Will you have an FTE or wage reduction from 02/15/20 through the end of your expected forgiveness application submission date?

[Square]

For EIDL, what will increase the loan amount, a higher or lower COGS?

[cgr]

For EIDL, what will increase the loan amount, a higher or lower COGS?

Lower

[Square]

Lower

Thanks

[myi]

   If I was approved for a loan for my business, while I used some of the funds towards three weeks already, and now that work is slow didn't issue any checks to any of my employees for the past week.

   Curious can I continue to claim unemployment even though I had been approved for a loan.
 Meaning they extended the deadline for when you have to use the loan.
 So while I have no work instead of me loosing on everything,   can I get unemployment benefit, meaning by filing the weekly claim?

[cgr]

So while I have no work instead of me loosing on everything,   can I get unemployment benefit, meaning by filing the weekly claim?

Your employees can definitely file if they're not receiving a paycheck.
As for yourself, if the total received divided by 24 weeks (assuming you're choosing this longer period) is less than $504 I think you should be able to claim no problem. I'm not sure if you can end-load the amount to only count as "earnings" for the last 2.5 months instead of over 24 weeks, although I can see good reason as to why you can make that claim since they only funded you for 2.5 months.

[myi]

Your employees can definitely file if they're not receiving a paycheck.
As for yourself, if the total received divided by 24 weeks (assuming you're choosing this longer period) is less than $504 I think you should be able to claim no problem. I'm not sure if you can end-load the amount to only count as "earnings" for the last 2.5 months instead of over 24 weeks, although I can see good reason as to why you can make that claim since they only funded you for 2.5 months.

Not quite sure if I understood the last few sentences of your post.

  If I would take the loan and divide  by 24 weeks I would be way over 504 for a week.

 Now my question was primarily if I pause the loan Usage, and continue when I have work again.

 As well I'm using the loan to pay my workers and towards business expenses.

[cgr]

Not quite sure if I understood the last few sentences of your post.

  If I would take the loan and divide  by 24 weeks I would be way over 504 for a week.

 Now my question was primarily if I pause the loan Usage, and continue when I have work again.

 As well I'm using the loan to pay my workers and towards business expenses.

Here's what I'm trying to say:
If the amount advanced for owner comp specifically (2.5X your 2019 monthly earnings) exceeds $504 weekly, it's possible that you can make the case to say that since they only advanced 2.5 months of payroll, you can spend that 2.5X of owner comp in any 2.5 months you choose- in your case the last 2.5 months of your 24 weeks, instead of "earning" it over 24 weeks where you lose out on UI when the additional $600 is available.

Neither the SBA nor the DOL have issued specific guidance on this, so it's impossible to say exactly what's possible and allowed and what's not- I'm hypothesizing here and trying to see the situation from different angles and what case you can make to get the best possible outcome.

[myi]

Here's what I'm trying to say:
If the amount advanced for owner comp specifically (2.5X your 2019 monthly earnings) exceeds $504 weekly, it's possible that you can make the case to say that since they only advanced 2.5 months of payroll, you can spend that 2.5X of owner comp in any 2.5 months you choose- in your case the last 2.5 months of your 24 weeks, instead of "earning" it over 24 weeks where you lose out on UI when the additional $600 is available.

Neither the SBA nor the DOL have issued specific guidance on this, so it's impossible to say exactly what's possible and allowed and what's not- I'm hypothesizing here and trying to see the situation from different angles and what case you can make to get the best possible outcome.

Gotchya, thanks for clarifying!
 I hear.

 So from your perspective what would you do in this scenario?

Would you go ahead and claim?

[flatbush guy]

Got a $1000 EIDL grant, can that effect PUA in NY?

[cgr]

Gotchya, thanks for clarifying!
 I hear.

 So from your perspective what would you do in this scenario?

Would you go ahead and claim?

It's hypothetical as this doesn't apply to me, so I'll tell you straight up I'd find a way to make it work somehow, if I felt I had a good argument in place.

[cgr]

Got a $1000 EIDL grant, can that effect PUA in NY?

If used for payroll, yes. If used for utilities/rent etc and it doesn't drive up your bottom line and put you over the earnings limit, you're good.

[myi]

It's hypothetical as this doesn't apply to me, so I'll tell you straight up I'd find a way to make it work somehow, if I felt I had a good argument in place.

I hear you.
  Thanks for the info.

 Will run it by my accountant and see what he feels I should do.

[TBD]

I hear you.
  Thanks for the info.

 Will run it by my accountant and see what he feels I should do.

It was argued already upthread that earnings from self employment even above $504 doesnt effect UI benefits. (Don'y ask me why but here is the source)
IMO you are good to go


https://www.labor.ny.gov/formsdocs/factsheets/pdfs/p836.pdf

IF YOU WORKED ON ANY DAYS, YOU WILL BE ASKED:
EXCLUDING EARNINGS FROM SELF-EMPLOYMENT,
DID YOU EARN MORE THAN $504?
If you worked at all during the week, you must indicate if
you earned more than $504 gross before taxes. This does
not include any money earned in self-employment.

[cgr]

It was argued already upthread that earnings from self employment even above $504 doesnt effect UI benefits. (Don'y ask me why but here is the source)
IMO you are good to go


https://www.labor.ny.gov/formsdocs/factsheets/pdfs/p836.pdf

IF YOU WORKED ON ANY DAYS, YOU WILL BE ASKED:
EXCLUDING EARNINGS FROM SELF-EMPLOYMENT,
DID YOU EARN MORE THAN $504?
If you worked at all during the week, you must indicate if
you earned more than $504 gross before taxes. This does
not include any money earned in self-employment.

Counter-argument: that question is a relic from the regular UI system and is not the intent for PUA certifications.

Honest question here: do you think that you can earn a few thousand a week in earned income and still be eligible for PUA? Again, DUA rules which PUA is based on and NY has clearly published guidelines on this and clearly states that the $504 applies to SE income.

[TBD]

Counter-argument: that question is a relic from the regular UI system and is not the intent for PUA certifications.

Honest question here: do you think that you can earn a few thousand a week in earned income and still be eligible for PUA? Again, DUA rules which PUA is based on and NY has clearly published guidelines on this and clearly states that the $504 applies to SE income.

Why do they ask this question for regular UI system??
If before the pandemic (regular UI system) I was terminated from a w-2 job, filed for UI, after few weeks started working SE 3 days a week earning $5,000 a week you would of still be eligible for partial UI according to the guidelines.
Don't see what changed now

Again, don't ask me common sense, I'm just saying what the guidelines are.

We have enough to suffer from all non-sense laws that the government makes, now that it comes out a benefit from it just take it... Don't leave legal money you are entitled to on the table to support all other non-sense programs from the government, because you don't understand it


I don't think that a person that is charged on bank fraud should sit 27 years in prison neither, If they claim THAT'S THE LAW! THIS IS ALSO "THE LAW"

[TBD]

9 The general loan forgiveness process described above applies only to loan forgiveness applications that are not reviewed by SBA prior to the lender’s decision on the forgiveness application.  A separate interim final rule on SBA Loan Review Procedures and Related Borrower and Lender Responsibilities describes SBA’s procedures for reviewing PPP loan applications and loan forgiveness applications.c.Deferral Period and Forgiveness Section 3(c) of the Flexibility Act provides that if the borrower does not apply for forgiveness of a loan within 10 months after the last day of the covered period, the PPP loan is no longer deferred and the borrower must begin paying principal and interest.  Therefore, the following text is added as a new paragraph b. at the end of Part III.2:   b. When must a borrower apply for loan forgiveness or start making payments on a loan? A borrower may submit a loan forgiveness application any time on or before the maturity date of the loan – including before the end of the covered period – if the borrower has used all of the loan proceeds for which the borrower is requesting forgiveness.  If the borrower applies for forgiveness before the end of the covered period and has reduced any employee’s salaries or wages in excess of 25 percent, the borrower must account for the excess salary reduction for the full 8-week or 24-week covered period, as described in Part III.5.

https://www.sba.gov/sites/default/files/2020-06/PPP--IFR--Revisions-to-Loan-Forgiveness-Interim-Final-Rule-and-SBA-Loan-Review-Procedures-Interim-Final-Rule-508.pdf

[TBD]

In particular, C-corporation owner-employees are capped by the amount of their 2019 employee cash compensation and employer retirement and health insurance contributions made on their behalf.  S-corporation owner-employees are capped by the amount of their 2019 employee cash compensation and employer 13
retirement contributions made on their behalf, but employer health insurance contributions made on their behalf cannot be separately added because those payments are already included in their employee cash compensation.  Schedule C or F filers are capped by the amount of their owner compensation replacement, calculated based on 2019 net profit.44 See 85 FR 21747, 21749 (April 20, 2020).   General partners are capped by the amount of their 2019 net earnings from self-employment (reduced by claimed section 179 expense deduction, unreimbursed partnership expenses, and depletion from oil and gas properties) multiplied by 0.9235.  For self-employed individuals, including Schedule C or F filers and general partners, retirement and health insurance contributions are included in their net self-employment income and therefore cannot be separately added to their payroll calculation.

[TBD]

They are still working on options how to get rid of the 140 Billion that congress approved and nobody is taking, you want they should take back funds?

DOESNT WORK


Example:  A borrower is using a 24-week covered period.  This borrower reduced a full-time employee’s weekly salary from $1,000 per week during the reference period to $700 per week during the covered period.  The employee continued to work on a full-time basis during the covered period, with an FTE of 1.0.  In this case, the first $250 (25 percent of $1,000) is exempted from the loan forgiveness reduction.  The borrower seeking forgiveness would list $1,200 as the salary/hourly wage reduction for that employee (the extra $50 weekly reduction multiplied by 24 weeks).  If the borrower applies for forgiveness before the end of the covered period, it must account for the salary reduction for the full 24-week covered period (totaling $1,200).

[cgr]

DOESNT WORK


Example:  A borrower is using a 24-week covered period.  This borrower reduced a full-time employee’s weekly salary from $1,000 per week during the reference period to $700 per week during the covered period.  The employee continued to work on a full-time basis during the covered period, with an FTE of 1.0.  In this case, the first $250 (25 percent of $1,000) is exempted from the loan forgiveness reduction.  The borrower seeking forgiveness would list $1,200 as the salary/hourly wage reduction for that employee (the extra $50 weekly reduction multiplied by 24 weeks).  If the borrower applies for forgiveness before the end of the covered period, it must account for the salary reduction for the full 24-week covered period (totaling $1,200).

Now that I have it all figured out in excel and I can track where the deductions do and don't affect forgiveness, here's my take:
In the above example the $1,200 deduction, even if it accounts for the full 24 weeks of deductions doesn't matter much because the owner was only funded ~10k for that employee, and over 24 weeks he's spending ~$16,800 even with the reduction in wages, so reducing forgiveness by $,1200 doesn't matter. The real issue is when you get to FTE reductions. If you follow the app, you'll see that you first total up everything, and then apply the FTE multiple. This means that the entire forgiveness hinges on the FTE multiple, and if reduced to (based on my quick calculations) .6 or less, you'll start seeing cuts to forgiveness.