Author Topic: SBA PPP and EIDL Small Business Loans (some money is forgivable)  (Read 535684 times)

Offline Deal Guy

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2900 on: January 18, 2021, 07:58:51 PM »
On cross river for partnership 1065.

They ask you for following documents.
1-driver license for partner A.
2-driver license for partner B.
3- void check
4- Feb 2020 bank statement.
5-1040 SCHEDULE C FROM 2019 OR 2020.
6- Form 1065 k-1

What are you supposed to submit for #5?
THERE IS NO SCHEDULE C ON A PARTNERSHIP.

They won't let you go further unless you put in #5 as well.

Offline YesThatsMe

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2901 on: January 18, 2021, 08:11:10 PM »
When K Servicing by Kabbage starting to accept for round 2?

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2902 on: January 18, 2021, 08:15:24 PM »
On cross river for partnership 1065.

They ask you for following documents.
1-driver license for partner A.
2-driver license for partner B.
3- void check
4- Feb 2020 bank statement.
5-1040 SCHEDULE C FROM 2019 OR 2020.
6- Form 1065 k-1

What are you supposed to submit for #5?
THERE IS NO SCHEDULE C ON A PARTNERSHIP.

They won't let you go further unless you put in #5 as well.

Looks like a mistake to me.

Offline ShimshonK

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2903 on: January 18, 2021, 08:39:45 PM »
@cgr would you mind clarifying these two responses below that seem to conflict? Or maybe it changed based on updated guidance?

Gotcha. So even though the loan was for 11 weeks of payroll (2.5 months), it can be forgiven after being 'distributed' in only 8 weeks.
So, when applying for forgiveness, a Schedule C PPP borrower has the flexibility to say they paid themself during any 8 or more weeks timeline within the 24 week period, and for PPP purposes it doesn't need to be determined beforehand (though, to certify for unemployment benefits, you'd need to know the current PPP timeline). Is that right?
Correct.
Owner comp must be paid via payroll, and to use the whole thing for owner comp (assuming he's the only employee) you need to wait 2.5 months- you can't use it over 8 weeks. The maximum amount of funds you can use over 8 weeks for owner comp is the annual owner comp amount included in the loan, divided by 52, times 8.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2904 on: January 18, 2021, 08:53:17 PM »
@cgr would you mind clarifying these two responses below that seem to conflict? Or maybe it changed based on updated guidance?
as written already up-thread I don't think that you need to wait 8 weeks to apply. since only by getting PPP2 disbursed u need to have funds of PPP1 used up, and you don't need to spend it on eligible FORGIVENESS expenses, eligible expenses is enough

Offline ShimshonK

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2905 on: January 18, 2021, 09:02:07 PM »
as written already up-thread I don't think that you need to wait 8 weeks to apply. since only by getting PPP2 disbursed u need to have funds of PPP1 used up, and you don't need to spend it on eligible FORGIVENESS expenses, eligible expenses is enough
Yes, I saw what you wrote and it is very interesting. I am curious to hear what our resident expert thinks about that since she seemed to disagree :)

But, in any case, I'm trying to understand the timeline for owners comp, as there are other potential factors at play (e.g. unemployment).

Offline Deal Guy

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2906 on: January 18, 2021, 09:03:54 PM »
On cross river for partnership 1065.

They ask you for following documents.
1-driver license for partner A.
2-driver license for partner B.
3- void check
4- Feb 2020 bank statement.
5-1040 SCHEDULE C FROM 2019 OR 2020.
6- Form 1065 k-1

What are you supposed to submit for #5?
THERE IS NO SCHEDULE C ON A PARTNERSHIP.

They won't let you go further unless you put in #5 as well.

Anyone else do a ppp with Cross River today as a 1065 partnership, and was asked to upload a 1040 schedule c, or not?

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2907 on: January 18, 2021, 09:12:57 PM »
@cgr would you mind clarifying these two responses below that seem to conflict? Or maybe it changed based on updated guidance?

Sorry- I misunderstood your use of the word "distributed" and took that to mean "for eligible expenses".
Owners can only pay themselves a maximum of 1/52 of what their owner compensation loan is based on per week. This means that if using eligible funds for owner compensation only you'll use it up in ~10.75 weeks, but if mixing in other expenses you can use as quickly as ~6.75 weeks.

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2908 on: January 18, 2021, 09:15:00 PM »
as written already up-thread I don't think that you need to wait 8 weeks to apply. since only by getting PPP2 disbursed u need to have funds of PPP1 used up, and you don't need to spend it on eligible FORGIVENESS expenses, eligible expenses is enough

You can't use PP1 funds in excess of 1/52 for owner compensation per week, so I disagree.
The quickest timeline I see is 6.75 weeks, as mentioned in my previous post.

Offline ShimshonK

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2909 on: January 18, 2021, 09:18:15 PM »
Sorry- I misunderstood your use of the word "distributed" and took that to mean "for eligible expenses".
Owners can only pay themselves a maximum of 1/52 of what their owner compensation loan is based on per week. This means that if using eligible funds for owner compensation only you'll use it up in ~10.75 weeks, but if mixing in other expenses you can use as quickly as ~6.75 weeks.
Thanks for clarifying

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2910 on: January 18, 2021, 11:24:11 PM »
You can't use PP1 funds in excess of 1/52 for owner compensation per week, so I disagree.
The quickest timeline I see is 6.75 weeks, as mentioned in my previous post.
@cgr you didn't address if you can apply before just need to wait for proceeds disbursement?

Offline oldguy

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2911 on: January 18, 2021, 11:24:36 PM »
I think the question was asked the 1st time around, just I can't seem to find it.
For an individual applying as an independent contractor with their schedule C can they still be on Unemployment? or only on partial unemployment?
« Last Edit: January 19, 2021, 12:21:43 AM by oldguy »

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2912 on: January 18, 2021, 11:31:47 PM »
You can't use PP1 funds in excess of 1/52 for owner compensation per week, so I disagree.
The quickest timeline I see is 6.75 weeks, as mentioned in my previous post.
https://www.sba.gov/sites/default/files/2021-01/PPP%20--%20IFR%20--%20Paycheck%20Protection%20Program%20as%20Amended%20by%20Economic%20Aid%20Act%20%281.6.2021%29-508.pdf
Page 52 doesn't mention any limit on the time-frame for using (not forgivness)payroll expenses for self employed

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2913 on: January 19, 2021, 12:01:02 AM »
@cgr you didn't address if you can apply before just need to wait for proceeds disbursement?

My understanding is that you need to have used the funds correctly (ie be eligible for forgiveness regardless if you can already apply or not), to qualify for Second Draw.

https://www.sba.gov/sites/default/files/2021-01/PPP%20--%20IFR%20--%20Paycheck%20Protection%20Program%20as%20Amended%20by%20Economic%20Aid%20Act%20%281.6.2021%29-508.pdf
Page 52 doesn't mention any limit on the time-frame for using (not forgivness)payroll expenses for self employed

https://www.masslive.com/business/2021/01/going-for-a-new-ppp-loan-sba-revises-rules-on-employee-and-owner-salaries-bonuses.html

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2914 on: January 19, 2021, 12:02:22 AM »
I think the question was asked the 1st time around, just I can't seam to find it.
For an individual applying as an independent contractor with their schedule C can they still be on Unemployment? or only on partial unemployment?

PPP and UI/PUA interactions depend on the state.
In NY, earning under $504 is fine (assuming you're not working).
In NJ, you need to earn less than your PWBR, and if it's more than 20% of your WBR, every dollar you earn gets deducted from your UI/PUA payment.

Offline ShimshonK

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2915 on: January 19, 2021, 12:08:47 AM »
PPP and UI/PUA interactions depend on the state.
In NY, earning under $504 is fine (assuming you're not working).
In NJ, you need to earn less than your PWBR, and if it's more than 20% of your WBR, every dollar you earn gets deducted from your UI/PUA payment.
So, in NJ, it seems to be ideal to claim the 20% for all 24 weeks, and then the difference as necessary?

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2916 on: January 19, 2021, 12:22:29 AM »
My understanding is that you need to have used the funds correctly (ie be eligible for forgiveness regardless if you can already apply or not), to qualify for Second Draw.

Used for sure you don't need before applying as the application states clearly that it only needs to be used before disbursement

https://www.sba.gov/sites/default/files/2021-01/PPP%20Second%20Draw%20Lender%20Application%20Form%20%281.8.2021%29-508.pdf


Offline oldguy

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2917 on: January 19, 2021, 12:23:59 AM »
PPP and UI/PUA interactions depend on the state.
In NY, earning under $504 is fine (assuming you're not working).
In NJ, you need to earn less than your PWBR, and if it's more than 20% of your WBR, every dollar you earn gets deducted from your UI/PUA payment.
Thank you!

Offline cgr

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2918 on: January 19, 2021, 12:37:58 AM »
Used for sure you don't need before applying as the application states clearly that it only needs to be used before disbursement

https://www.sba.gov/sites/default/files/2021-01/PPP%20Second%20Draw%20Lender%20Application%20Form%20%281.8.2021%29-508.pdf

That I agree. You can apply in advance as long as you meet the rules the day the funds hit your account.

Offline TBD

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Re: SBA PPP and EIDL Small Business Loans (some money is forgivable)
« Reply #2919 on: January 19, 2021, 12:40:59 AM »
https://www.masslive.com/business/2021/01/going-for-a-new-ppp-loan-sba-revises-rules-on-employee-and-owner-salaries-bonuses.html
I think this article is only about forgiveness.

I didn't find anywhere that you need to be eligible for forgiveness before applying for PPP2, In reply#2874 there is a legal opinion to the contrary that there is NO timeframe on applying for PPP2 if funds are used before disbursement. would appreciate if anyone can post here legal opinions to the contrary