You should consult with your tax advisor to see how PPP loan forgiveness may affect you and your business. endstream endobj startxref Before you apply for a PPP loan, it is important to review the options with your CPA or financial advisor. This second loan is called a second draw PPP loan.. However, be aware that many of these lenders will only be accepting applications from customers that have a pre-existing relationship with the lender, and/or the lender will be prioritizing applications from those customers. Normal operating expenses generally dont go on that form unless they are past due, http://sbaloanforms.com/blog/sba-form-2202-schedule-of-liabilities.html. How will I be able to obtain forgiveness for my PPP loan? Formula for sole proprietors without employees: Step 1: From your 2019 or 2020 IRS Form 1040 Schedule C, you may elect to use either your line 7 gross income amount or your line 31 net profit amount. For example, if youre looking to change your business structure from a sole proprietorship to an S corporation, you will first need the approval of the SBA. Step 4: Add the outstanding amount of any EIDL made between January 31, 2020 and April 3, 2020 that you seek to refinance, less the amount of any advance under an EIDL COVID-19 loan (because it does not have to be repaid). You can verify eligibility on the first page of the EIDL application. Click here for our Advertiser Disclosure. f`~5U This means sole proprietors without employees will all be able to get their PPP loans fully forgiven simply by filling out and submitting the one-page certification form to their lender. From March 5 to March 11, grants will be awarded to waitlisted businesses that applied during the previous application rounds, but new applications will not be accepted during this round. I received an email for a loan processor asking for a couple of things from me. How Much Does Home Ownership Really Cost? Real estate agents can use SBA 7(a) loans for buying or maintaining a vehicle, refinancing business debt, and expanding a real estate brokerage. Does the calculation of payroll costs include the amount of commission I pay agents and report on a 1099 form? How much money can I receive for an EIDL loan? According to the SBA, applicants do not need to take any action at this time. The first two rounds for applications for the relief grant program were in January and February, and those awarded grants in those rounds were already notified. The full amount of the loan can be up to $500,000, with interest rates of 3.75% for for-profit businesses. For the loan to be fully forgivable, any PPP loan proceeds that are not spent on payroll costs must be spent on certain non-payroll costs: namely, mortgage interest payments, rent, operations expenditures, property damage costs, supplier costs, worker protection expenditures, and utilities. Real estate agents Where can I find more information about EIDLs? Use r/TargetedEIDL for advance/grant issues. There are 2 programs, that we can take advantage of as real estate agents, that allow us to continue to operate despite what's going on: Economic Injury Disaster A government guarantee reduces the risk to the borrower. Independent contractors who have been adversely impacted by the COVID-19 emergency are eligible. To verify full-time equivalent employees, you must submit payroll tax filing reported (or that will be reported) to the IRS (typically, Form 941) and state quarterly business and individual employee wage reporting and unemployment insurance tax filings reported (or that will be reported) to the relevant state. But before signing on the dotted line, you should be aware of some of the disadvantages of this loan. What should I do? SBA 7(a) loans for working capital and equipment have terms of up to 10 years, while SBA 7(a) loans for commercial real estate loans have terms of up to 25 years. Consult with your accountant if you need assistance determining your gross receipts, and/or refer to SBAs FAQ document available, Once received, the loans may be used by brokers for payroll costs (including paid sick leave), employee salaries, insurance premiums (including health, group life, vision, and dental insurance premiums), rent expenses, mortgage expenses, utility expenses, PPE expenses, operations expenses, property damage costs, supplier costs, and other debt obligations. The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters. Our experts love this top pick,which featuresa0% intro APRuntil 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee. WebAs of September 8, 2021, new COVID-19 EIDL policy changes took effect as follows: Maximum loan cap increased from $500,000 to $2 million. Please be advised that you are not required to seek services from any of the companies suggested. See Question 3A. You must also provide a 2020 invoice, bank statement, or book of record to establish you were in operation on or around February 15, 2020. Additionally, borrowers can obtain full loan forgiveness if they were unable to operate between February 15, 2020 and the end of the Covered Period at the same level of business activity as before February 15, 2020 due to COVID-19 related operating restrictions, as long as they do not reduce salaries or hourly wages by more than 25 percent for any employee during the Covered Period compared to the period between January 1, 2020 and March 31, 2020. sba7a.loans is an independently owned and operated website and has, https://www.sba7a.loans/sba-7a-loans-small-business-blog/how-do-commercial-real-estate-loans-work, Must be able to pay the loan agreement in a time frame based on the companys projected operating cash flow, Must not have funds available from other sources, Business must be located in and operate within the United States and/or U.S. territories, Must not invest or speculate, or be in the business of owning rental real estate for profit, Must have a tangible net worth of less than $15 million and an average net income of less than $5 million after taxes for the preceding two years. Save my name, email, and website in this browser for the next time I comment. For businesses established after the second quarter of 2019, the SBA compares revenue from any 2020 quarter to revenue from the third or fourth quarter of 2019. EIDL Please visit some of our family of sites at: Thank You so much. If you operate as a sole proprietor, you can use the PPP loan proceeds as a substitute for the compensation you would normally receive from commissions. Theres Still Time to Apply with FEMA: Those who have uninsured or underinsured losses can apply with FEMA in one of three ways: online at This may help you. Note: For second draw PPP loans, sole proprietors have the option of calculating average monthly payroll costs based on the 1-year period before the date on which the loan is made rather than the 2019 calendar year. Businesses with fewer than 500 employees including sole proprietors, independent contractors, and other self-employed individuals all qualify for initial PPP loans. For sole proprietors without employees, proprietor expenses or owner income replacement can encompass the entire principal of the loan, so no additional supporting documentation will need to be submitted to obtain forgiveness. All rights reserved. If your business has been hurt by COVID-19, it may be worth applying for an EIDL loan. Step 3: Multiply the average monthly gross income or net profit amount from Step 2 by 2.5. An eligible entity must be: (i) located in a low-income community; (ii) have suffered an economic loss of greater than 30 percent; and (iii) employ not more than 300 people (sole proprietors and independent contractors are also eligible). Webrob stafford daughter chicago fire. Agents may qualify for their own PPP loans. Businesses that were not in operation on or before February 15, 2020 are not eligible for second draw PPP loans. If youre an independent contractor, you may be WebCOVID EIDL Loans Information as of September 8, 2021 Contents Introduction Section 1: COVID EIDL Program Information Section 2: Submitting a New COVID EIDL Application While the SBA states that the application can be completed in around two hours, others have stated that it took them around 45 minutes to an hour to complete. Your business structure must remain the same for the life of the loan. If you need assistance finding a PPP lender, SBA has created a Lender Match tool that allows you to search for lenders based on your Zip Code: Search for community banks based on your Zip Code: List of community development financial institutions (Excel spreadsheet that you can sort to list California institutions): List of 2019 Top 100 U.S Small Business Administration (SBA) Lenders: The CARES Act II signed on December 27 creates a simplified loan forgiveness application process for loans under $150,000. Which of the SBA loans should I apply for? You do not need to take any action related to this decision prior to filling out the loan forgiveness application. The PPP also comes with usage restrictions. However, government officials have stated that the PPP process will be significantly expedited. Things are still changing on a daily basis and more and more clarity is being provided, but as of now For the Payroll Protection Plan (PPP): The sum of payments of any compensation to or income of a sole proprietor/independent contractor that is a wage, commission income, net earnings from self-employment or similar compensation, not more that $100,000 annually as pro-rated during the covered period,(February 15, 2020-June 30,2020). Cash compensation including salary, wages and tips is capped at $100,000 of annualized cash compensation per employee. Mary Girsch-Bock is the expert on accounting software and payroll software for The Ascent. SBAs EBL program guide is available here: https://www.sba.gov/document/support--express-bridge-loan-pilot-program-guide, CALIFORNIA SMALL BUSINESS COVID-19 RELIEF GRANT PROGRAM. Any EIDL Advance Amounts previously deducted from a borrowers forgiveness amount will be remitted to the lender, together with interest to the remittance date. Tags: Real estate agents can use SBA 7(a) loans for: Buying or maintaining a vehicle: Since real estate agents usually need to travel on a daily basis to meet with clients and show properties, an SBA 7(a) loan can be a great way to fund the purchase or repair of a business vehicle. Head to the COVID Legal Documents page on car.org for access to: Step-by-Step Guide to PPP Loan Forgiveness for Borrowers With Employees, Step-by-Step Guide to PPP Loan Forgiveness for Borrowers Without Employees. However, keep in mind that all loan proceeds for borrowers without employees can be attributed as proprietor expenses or owner income replacement, and there is no need for these borrowers to attribute any of the loan proceeds to the non-payroll costs category. Schedule of liabilities for a real estate agent : r/EIDL - reddit Your net profit for 2019 was $230,000. Pursuant to the COVID relief package that passed on December 27, 2020 (known as CARES II Act), borrowers that have previously received a PPP loan will now be allowed to take out a second PPP loan. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); The Commission Calculator is Available NowThe Commission Calculator was created to help you understand what milestones you need to reach to hit your commission goal. Multifamily Minute Reader Reflections: How Will You Address Vacancy in 2023? Entities eligible for a supplemental targeted advance will be able to receive an additional $5,000 grant. However, keep in mind that all loan proceeds for borrowers without employees can be attributed as proprietor expenses or owner income replacement, and there is no need for these borrowers to attribute any of the loan proceeds to the non-payroll costs category. In this case, we would recommend looking into the EIDL program instead. The following are the eligible uses of grant funds: All employee expenses including payroll costs, health care benefits, paid sick, medical, or family leave, and insurance premiums; Working capital, overhead (including rent, utilities, mortgage principal and interest payments (excluding mortgage prepayments)), debt payments (principal and interest) incurred before March 1, 2020; Costs associated with re-opening business operations after being fully or partially closed due to state-mandated COVID-19 health and safety restrictions and business closures; Costs associated with complying with COVID-19 federal, state or local guidelines for reopening with required safety protocols, including but not limited to equipment, plexiglass barriers, outdoor dining, PPE supplies, testing, and employee training expenses; or. Thus, if you are a Schedule C filer whose gross income is greater than $150,000 and you apply for a PPP loan, the SBA may send you a Loan Necessity Questionnaire to verify that current economic uncertainty made the loan request necessary to support the ongoing operation of your business.