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

[talmid chuchem]

It's a difficult question honestly, because some non-profits get approved for 50% of Gross Profit less COGS, while some get approved for 50% of COGS only. You might need to submit your application and if it comes in too low talk it out with an agent to explain how the day to day works.

what do i enter as cost of operation?
whats the difference between COGS & operation? goods mean stuff that i gave out? & cost of operation mean utilities, cleaning etc?
how does money that the cong gives out for tzedukah (for example קמחא דפסחא0) count? does it count as any of these?
(BTW i donated via paypal, & i think everyone should)

[Deal Guy]

It's actually more than 7%...
https://home.treasury.gov/system/files/136/PPP-IFR-Loan-Forgiveness.pdf
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.
This is done to remove the “employer” share of self-employment tax.

A regular schedule c should be the same as a partnership, since it also has a deduction of the employers share of income tax.

[cgr]

A regular schedule c should be the same as a partnership, since it also has a deduction of the employers share of income tax.

Correct me if I'm wrong but I think a Schedule C filer pays employer taxes based on Line 31, while for a 1065 employer taxes deducted first and is already part of the calculation on line 14a.

[talmid chuchem]

what do i enter as cost of operation?
whats the difference between COGS & operation? goods mean stuff that i gave out? & cost of operation mean utilities, cleaning etc?
how does money that the cong gives out for tzedukah (for example קמחא דפסחא0) count? does it count as any of these?
(BTW i donated via paypal, & i think everyone should)

@crg have an idea?

[Deal Guy]

Correct me if I'm wrong but I think a Schedule C filer pays employer taxes based on Line 31, while for a 1065 employer taxes deducted first and is already part of the calculation on line 14a.

I don't think that is correct.
Both a schedule c and a 1065, both have a deductible part of self employment tax, that ends up on your 1040 schedule 1, line 14.

[cgr]

@crg have an idea?

I'll tell you what I've seen with non-profits:
Approval for 50% of Gross Profit
Approval for 50% of Gross Profit less COGS
Approval for 50% of COGS

So honestly I'm reluctant to say anything more than I already have, because it depends on which one of the three they decide to go with.

I do think that approval for 50% of COGS is most common with non-profits, but I don't want to advise you to put in your entire profit as cost (even though you can definitely make a case for it) because if they decide on a different approach you'll be burned.

[talmid chuchem]

I'll tell you what I've seen with non-profits:
Approval for 50% of Gross Profit
Approval for 50% of Gross Profit less COGS
Approval for 50% of COGS

So honestly I'm reluctant to say anything more than I already have, because it depends on which one of the three they decide to go with.

I do think that approval for 50% of COGS is most common with non-profits, but I don't want to advise you to put in your entire profit as cost (even though you can definitely make a case for it) because if they decide on a different approach you'll be burned.

my question is what the difference between COGS & cost of operation?

[cgr]

my question is what the difference between COGS & cost of operation?

A non-profit usually doesn't have COGS (Generally COGS is defined as the materials and supplies purchased to create a finished product, but the SBA seems to broaden the definition to encompass other costs when they feel like it) unless they manufacture products for charity.
For a non-profit the SBA expects you to list overhead costs, but there's no exact definition of you should or shouldn't include.

[yossig]

Thank you. Any reports of EIDL advance deposits (on June applications) still getting deposited or is it over for now?

bump

[talmid chuchem]

A non-profit usually doesn't have COGS (Generally COGS is defined as the materials and supplies purchased to create a finished product, but the SBA seems to broaden the definition to encompass other costs when they feel like it) unless they manufacture products for charity.
For a non-profit the SBA expects you to list overhead costs, but there's no exact definition of you should or shouldn't include.

thats exactly my question, There are COGS (distributing food, and weekly shalesh seudes, coffee etc (it's a shul)), & then there is is utilities, cleaning etc. do I enter all in COGS? or utilities cleaning etc are cost of operation?

[sillypainter]

@cgr did you see any EIDL being more than 150k or that's the ceiling?

[Mordyk]

thats exactly my question, There are COGS (distributing food, and weekly shalesh seudes, coffee etc (it's a shul)), & then there is is utilities, cleaning etc. do I enter all in COGS? or utilities cleaning etc are cost of operation?

No cogs.  You use cost of operation

[cgr]

@cgr did you see any EIDL being more than 150k or that's the ceiling?

That's the current cap.
https://www.democrats.senate.gov/newsroom/press-releases/in-new-letter-to-sba-administrator-schumer-cardin-and-shaheen-call-on-sba-to-reverse-policy-that-limits-economic-disaster-loan-program-eidl-loans-to-150k-and-demand-sba-open-up-program-to-non-farm-applicants-senators-say-sbas-mismanagement-of-critical-program-harms-small-businesses-and-demand-greater-transparency

[talmid chuchem]

No cogs.  You use cost of operation

then according to this, i have a %66 of getting nothing....

I'll tell you what I've seen with non-profits:
Approval for 50% of Gross Profit
Approval for 50% of Gross Profit less COGS
Approval for 50% of COGS

So honestly I'm reluctant to say anything more than I already have, because it depends on which one of the three they decide to go with.

I do think that approval for 50% of COGS is most common with non-profits, but I don't want to advise you to put in your entire profit as cost (even though you can definitely make a case for it) because if they decide on a different approach you'll be burned.

[cgr]

https://www.sba.gov/sites/default/files/2020-07/5000-20038.pdf

Summary: earliest possible date to submit forgiveness application is August 10.

I'll iyh be going live on Monday with an excel version if the forgiveness application that will assist in figuring out your total forgiveness.
Includes the calculations that most find difficult such as which FTE method to use, calculates wage reduction above FTE reduction so that there's no double-counting, and accounts for FTE wage reduction exceptions that occur when an employee voluntarily quits or the like. It'll also present you with the EZ form if you're eligible based on your entries. If you're not the information will populate on the regular forgiveness form.

[aygart]

https://www.sba.gov/sites/default/files/2020-07/5000-20038.pdf

Summary: earliest possible date to submit forgiveness application is August 10.

I'll iyh be going live on Monday with an excel version if the forgiveness application that will assist in figuring out your total forgiveness.
Includes the calculations that most find difficult such as which FTE method to use, calculates wage reduction above FTE reduction so that there's no double-counting, and accounts for FTE wage reduction exceptions that occur when an employee voluntarily quits or the like. It'll also present you with the EZ form if you're eligible based on your entries. If you're not the information will populate on the regular forgiveness form.

https://future.aicpa.org/resources/download/ppp-loan-forgiveness-calculator-excel

[cgr]

https://future.aicpa.org/resources/download/ppp-loan-forgiveness-calculator-excel

It's severely lacking. Doesn't assist with any of the specifics I pointed out above.

[TBD]

https://www.sba.gov/sites/default/files/2020-07/5000-20037-508.pdf

Examples of COVID-19 EIDL suspicious activity include,but are not limited to,the following:➢➢➢➢➢➢
Use of stolen identities or EIN or SSN numbers to qualify for the EIDL advance or EIDL loan.
Purported businesses, including front or shell companies,lacking indicia of operating presence or history,receiving EIDL advances or EIDL loans.
Applicants working with third parties to obtain EIDL advances or EIDL loans in exchange for keeping a percentage of the funds.
Account holders that are victims of social engineering schemes and may not know that the source of the funds isan EIDL advance or EIDL loan.
A customer advises afinancial institution thatthe customerreceiveda COVID-19 EIDL ACH deposit from “SBAD TREAS310” and “Origin No. 10103615” into their account, but did not apply for a COVID-19 EIDL loan.
A customer receives a COVID-19 EIDL ACH deposit after thefinancial institutionpreviously denied thecustomer’s Paycheck Protection Program (PPP) loan application, particularly wherethe financial institutionidentified inaccurate or incomplete information in the customer’s PPP loan application.

Additionally, depository financial institutions are encouraged to examine the following transactions more closely to determine if they constitute COVID-19 EIDL suspicious activity:➢➢➢
A customer not known to be a small business, sole proprietor, or independent contractor receives a lump sum COVID-19 EIDLACHdeposit from “SBAD TREAS 310” and “Origin No. 10103615”into a personal account.
A new customer opens an account and shortly thereafter receives a COVID-19 EIDL ACH lump sum deposit from “SBAD TREAS 310” and “Origin No. 10103615”.
A single account receivesmultiple EIDLadvanceor multiple EIDL loandeposits.

[cgr]

PPP Forgiveness Calculator now live in the first post in my signature block below.
Hope you guys enjoy

[TBD]

PPP Forgiveness Calculator now live in the first post in my signature block below.
Hope you guys enjoy

Thanks @cgr but hope won't need to use it just will be automatic forgiveness