Author Topic: SBA PPP and EIDL Small Business Loans (some money is forgivable)  (Read 357126 times)

Offline skv

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2300 on: August 11, 2020, 11:16:39 PM »
Forgive me if this was already answered. Are there clear guidelines as to how self employed needs to spend the PPP loan? Is it necessary to write yourself checks? Is there rules about how quickly you can spend it?

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2301 on: August 11, 2020, 11:21:19 PM »
Forgive me if this was already answered. Are there clear guidelines as to how self employed needs to spend the PPP loan? Is it necessary to write yourself checks? Is there rules about how quickly you can spend it?

Basically there's nothing you need to do and no limitation on how fast you can spend. It's based on your 2019 Schedule C instead of actual payments (unless you want to spend it on other eligible expenses). If you are concurrently on UI and want to stay that way, I suggest you stick to your state weekly limits even though on the PPP end it doesn't much matter.
https://bench.co/blog/operations/ppp-forgiveness-contractors-sole-props/

Partnerships (K-1 1065) must cut themselves checks.
C & S corps must pay themselves via payroll.

Offline skv

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2302 on: August 11, 2020, 11:35:13 PM »
Partnerships (K-1 1065) must cut themselves checks.
C & S corps must pay themselves via payroll.

Thanks!

Offline yitz1000

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2303 on: August 12, 2020, 10:52:13 AM »
Partnerships (K-1 1065) must cut themselves checks.
C & S corps must pay themselves via payroll.
Source?

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2304 on: August 12, 2020, 11:07:54 AM »
Source?

New SBA PPP interim rules released today.
https://home.treasury.gov/system/files/136/PPP--Loan-Forgiveness-FAQs.pdf

Summary:
  • While paid or incurred retirement and healthcare contributions are eligible for forgiveness, accelerated payments cannot be included. (employee and where applicable for employer as well)
  • C & S Corporation owner's forgiveness on retirement contributions is capped by 2.5/12 of 2019 contributions
  • General Partners (K-1 1065) compensation is only eligible for forgiveness if payments to partners are made during the covered period (this is not spelled out for sole props so perhaps it's not a requirement for them)
  • Interest on unsecured loans are not eligible for forgiveness
  • FTE reduction exceptions apply to those earning over 100k as well

Offline yitz1000

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2305 on: August 12, 2020, 11:12:20 AM »

(this is not spelled out for sole props so perhaps it's not a requirement for them)
Ok. Specifically for this I was asking for a source. Many sole props don't have payroll and did not start one up for PPP.

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2306 on: August 12, 2020, 11:24:47 AM »
Ok. Specifically for this I was asking for a source. Many sole props don't have payroll and did not start one up for PPP.

A sole prop (Schedule C) owner is not legally allowed to be on payroll.
Did you check out the link in the previous post?


Basically there's nothing you need to do and no limitation on how fast you can spend. It's based on your 2019 Schedule C instead of actual payments (unless you want to spend it on other eligible expenses). If you are concurrently on UI and want to stay that way, I suggest you stick to your state weekly limits even though on the PPP end it doesn't much matter.
https://bench.co/blog/operations/ppp-forgiveness-contractors-sole-props/


Offline yitz1000

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2307 on: August 12, 2020, 11:28:04 AM »
A sole prop (Schedule C) owner is not legally allowed to be on payroll.
Did you check out the link in the previous post?

Nevermind, I misread your post.

Offline avij1000

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2308 on: August 12, 2020, 01:36:35 PM »
Hi,

Its possible this was discussed but the thread is extremely long...

I received the EIDL but was denied for the SBA loan of 150k due to putting my dba name. I corrected this back in June and was told yrt again yesterday that it shoudl hopefully be processed in another month. I see there are companies offering to expedite or get the sba loan done for you. Does anyone have any info on this if i should use such a company or wait it out?

Thanks.

Offline ExGingi

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2309 on: August 12, 2020, 02:02:25 PM »
Updated version now available.
Includes SBA rules as of 08/04/20 as well as a formula fix to the wage reduction calculations.
If you downloaded a previous version I suggest you get the latest one to make sure your calculations reflect the latest guidelines.

I just downloaded it and entered my information, very straightforward Schedule C with no other expenses. It's showing 100% of the loan forgivable? Is that true?
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline coffeebean

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2310 on: August 12, 2020, 02:08:39 PM »
I just downloaded it and entered my information, very straightforward Schedule C with no other expenses. It's showing 100% of the loan forgivable? Is that true?
Congrats!

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2311 on: August 12, 2020, 02:13:47 PM »
I just downloaded it and entered my information, very straightforward Schedule C with no other expenses. It's showing 100% of the loan forgivable? Is that true?

As the calculator creator, yes it's true :)
As a general rule all Schedule Cs will receive 100% forgiveness without needing to do a thing.

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2312 on: August 12, 2020, 02:16:02 PM »
I opened a WhatsApp for status updates on NY, NJ, and Federal coronavirus aid available. I'm not sure if forum rules allow me to post links, so if you'd like to see them PM me for the WhatsApp link.

Offline coffeebean

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2313 on: August 12, 2020, 02:25:19 PM »
I just downloaded it and entered my information, very straightforward Schedule C with no other expenses. It's showing 100% of the loan forgivable? Is that true?
Which bank did you use?

Offline ExGingi

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2314 on: August 12, 2020, 03:20:08 PM »
As the calculator creator, yes it's true :)
As a general rule all Schedule Cs will receive 100% forgiveness without needing to do a thing.

I guess we still need to apply for forgiveness, don't we?
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2315 on: August 12, 2020, 03:27:06 PM »
I guess we still need to apply for forgiveness, don't we?

Based on the current rules, yes.

Offline ExGingi

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2316 on: August 12, 2020, 03:32:54 PM »
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2317 on: August 12, 2020, 03:55:52 PM »
I opened a WhatsApp for status updates on NY, NJ, and Federal coronavirus aid available. I'm not sure if forum rules allow me to post links, so if you'd like to see them PM me for the WhatsApp link.

Added a link to my site (available in my signature block below) so no PM is necessary.

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2318 on: August 12, 2020, 06:56:52 PM »
And... the SBA released some more FAQs...

https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequently-Asked-Questions.pdf
51. Question: Do payments required for the provision of group health care benefits, including insurance premiums, include vision and dental benefits?
Answer: Yes.

https://home.treasury.gov/system/files/136/PPP--Loan-Forgiveness-FAQs.pdf
Question: SBA will deduct the amount of any Economic Injury Disaster Loan (EIDL) advance received by a PPP borrower from the forgiveness amount remitted to the lender. How will a lender know the amount of the EIDL advance that will be automatically deducted by SBA?
Answer: If a borrower received an EIDL advance, SBA is required to reduce the borrower’s loan forgiveness amount by the amount of the EIDL advance. SBA will deduct the amount of the EIDL advance from the forgiveness amount remitted by SBA to the lender. The lender will be able to confirm the amount of the EIDL advance that will be automatically deducted by SBA from the forgiveness payment by reviewing the borrower’s EIDL advance information in the PPP Forgiveness Platform.

https://home.treasury.gov/system/files/136/PPP-IFR-Appeals-of-SBA-Loan-Review-Decisions-Under-the-PPP.pdf

Offline skv

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2319 on: August 13, 2020, 09:27:27 AM »
@cgr
I totally believe you, but is there a source to the fact that on a schedule C there is no requirements of how/when to spend PPP funds? I looked at the loan forgiveness application but by the required documentation part I wasn't sure that they are exempt from proof that they used funds on "payroll". Is it written out clearly somewhere?