A borrower may request that the SBA review the lenders decision regarding forgiveness of the loan in the event that the lender determines that the borrower is not eligible for forgiveness. If the full principal of the PPP loan is forgiven, the borrower is not responsible for the interest accrued. If you choose to apply for assistance, work with your lender to apply as soon as possible. Real Estate Agents and Managers Cash compensation including salary, wages and tips is capped at $100,000 of annualized cash compensation per employee. How Much Does Home Ownership Really Cost? 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. (Note: Sick leave tax credits under the Families First Coronavirus Response Act (FFCRA) are not included as payroll costs that can be paid with a PPP loan. No. Image source: Author. company. A borrower is eligible for loan forgiveness for amounts the borrower spends during a period which begins on the date the lender makes the first disbursement of the PPP loan to the borrower and ends between 8 and 24 weeks after disbursement of the loan (the Covered Period). Applications for the program must be submitted through a Community Development Financial Institution (CDFI) that has partnered with the state of California to distribute the funds. Applications will be reviewed to determine whether the applicant meets the eligibility requirements. Once approved, money is usually transferred to your bank account, using the banking information that you provided in the application. If someone took the drive-through option literally at your restaurant, you cannot use an EIDL loan to repair the damage. We are not affiliated with the Small Business Administration (SBA). Real-estate brokers, are you looking for clarity around what help youre eligible for during the COVID-19 crisis? CPA Tax Services. How will the decision be made as to who receives a grant? Collateral can include assets such as inventory and equipment as well as intangible assets such as trademarks and copyrights. According to the Wall Street Journal, it usually takes SBA around one month to process a 7(a) loan. The Economic Injury Disaster Loan (EIDL) program is a loan program guaranteed by the SBA. Click here for our Advertiser Disclosure. The estimated amount of the loan used for payroll costs. Owner Income Replacement is capped at 2.5 months worth or $20,833 per individual, whichever is less, for a 24-week Covered Period. If youre an independent contractor, you may be For C-corporation owner-employees, owner income replacement is capped at 2.5 times their average monthly 2019 or 2020 employee cash compensation and employer retirement and health insurance contributions made on their behalf. Check with your bank to determine if it is currently offering EBLs and to see if you qualify. If you need to visit the SBA directly please click here: sba.gov. Thus, if your Schedule C gross income or net profit amount is $100,000 or greater, you qualify for the maximum loan available to a sole proprietor without employees, which is $20,833.33. Will I need to pay income tax on the PPP loan proceeds if I use the proceeds for income replacement? The following are the ineligible uses of grant funds: Human resource expenses for the State share of Medicaid, Personal expenses or other expenses unrelated to COVID-19 impacts, Expenses for repairs from damages already covered by insurance, Reimbursement to donors for donated items or services. However, keep in mind that EIDLs (with the exception of targeted advances) are conventional loans and not forgivable. This website does not endorse or charge you for any service or product. For operations expenditures: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments. Most brokers are likely to be eligible for loans which are being made available through the SBA. C.A.R. Note: Since SBA allows borrowers to use 2019 or 2020 payroll costs to calculate their maximum PPP loan amount for both first and second draw PPP loans originating in 2021, borrowers will want to use the year in which their payroll costs were highest to obtain the largest PPP loan amount. The SBA 504 loan is intended for the purchase and construction of owner-occupied commercial real estate. Real estate agents can use SBA 7(a) loans for buying or maintaining a vehicle, refinancing business debt, and expanding a real estate brokerage. If the eligible entity has previously applied for EIDL assistance on or before December 27, 2020 but has not yet received an EIDL advance, the entity will be eligible to receive a grant of $10,000. Eligible worker protection expenditures include expenditures for personal protective equipment and adaptive investments to help a loan recipient comply with federal health and safety guidelines or any equivalent State and local guidance related to COVID-19 during the period between March 1, 2020, and the end of the national emergency declaration. 2021Copyright CALIFORNIA ASSOCIATION OF REALTORS. So, while the housing market may be hot, theres a ton of competition to contend with. Both of these loan programs offer a number of advantages for real estate agents. We can help you determine which program would be the right fit for your business, as well as determine the appropriate loan amount. Required fields are marked *. We offer property tax relief to help you avoid penalties, collection This documentation can be submitted: (i) at the time of the loan application; (ii) on or before the date the borrower submits an application for loan forgiveness; or, (iii) if the borrower does not apply for loan forgiveness, at SBAs request. As an Ebby Halliday client, youll benefit from knowledgeable, respected agents and a team of trusted professionals dedicated to making buying or selling your 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. The SBA will reach out to those who qualify to explain how to receive a targeted EIDL advance. A real estate agent has called out her landlord clients for jacking up the rent too much, with stunned tenants welcoming the 'brutal truth' of her comments. CMBS Loans, What is an initial Paycheck Protection Program loan, and who qualifies? Press question mark to learn the rest of the keyboard shortcuts. Independent contractors and sole proprietors are also eligible. But what if we told you that the, The Commission Calculator is Available NowWe love the holidays at the Paperless Agent. Such documentation may include relevant tax forms, including annual tax forms, or, if relevant tax forms are not available, a copy of the borrowers quarterly income statements or bank statements. Will this affect my PPP application? Read through - EIDL eligibility criteria starts at page 64. The actual loan size borrowers receive will be determined by a formula based on average total monthly payroll costs over a one-year period. For worker protection expenditures: Copy of invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments, and documentation that the expenditures were used by the borrower to comply with applicable COVID-19 guidance during the Covered Period. Your lender may have additional instructions for submitting the PPP loan forgiveness application or may require you to submit additional documentation. Are expenses paid with forgiven PPP loan proceeds deductible from my federal and state income taxes? Calculate your average monthly payroll cost and multiply that number by 2.5. As real estate agents, we are exactly who these legislations were designed to help. 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). Eligible costs are only those costs incurred due to the COVID-19 pandemic and the health and safety restrictions such as business interruptions or business closures incurred as a result of the COVID-19 pandemic. However, if you get the $10,000 advance from the EIDL, you cannot use it for payroll costs and must instead use it for other business expense obligations. Multifamily Loans,Multifamily Today, Businesses that received a loan subject to the previous limits do not need to submit a request for an increase. If this amount is zero or less, you are not eligible for a PPP loan. These are sample forms which illustrate the information you will need to apply for a PPP loan. is not making any representations or warranties regarding the quality of their services. You should carefully review the options available to select the SBA loans that will be the best fit for your needs and circumstances. A small business must satisfy the following criteria to be eligible to receive a grant award: Must be a sole proprietor, independent contractor, or registered for-profit business entity (e.g., C-corporation, S-corporation, limited liability company, partnership) that has yearly gross revenue of $2.5 million or less (but at least $1,000 in yearly gross revenue) based on the most recently filed tax return. Independent contractors who have been adversely impacted by the COVID-19 emergency are eligible. Its a time for family, friends and creating lasting memories. Demonstrate at least a 25 percent reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same 2019 quarter. Real estate agents can use SBA 7(a) loans for buying or maintaining a vehicle, refinancing business debt, and expanding a real estate brokerage. Webhttps://crumrealestate.comHere is information to help Independent Contractors get through the Coronavirus epidemic. Is SIC code 6531 eligible for EIDL loan? To verify non-payroll costs, you must submit: For mortgage interest payments: Copy of lender amortization schedule and receipts or cancelled checks verifying eligible payments from the covered period. Only those who applied for EIDL assistance on or before December 27, 2020 are eligible to receive a targeted EIDL advance. We have not reviewed all available products or offers. Borrowers can exclude from loan forgiveness calculations employees who turned down good faith offers to be rehired at the same hours and wages as before the pandemic. The 2019 or 2020 IRS Form 1040 Schedule C that was provided by a sole proprietor at the time of the PPP loan application must be used to determine the amount of gross income or net profit allocated to the borrower for the Covered Period. A source for information on applying for LOANS from the SBA's Covid-19 EIDL, reconsideration issues for declined loan applicants, and EIDL increase requests. Many real estate agents may find that the SBA 7(a) program, the Small Business Administrations most commonly used loan program, is the best fit for their needs. Since the definition of payroll costs includes employee salaries, wages paid by an S Corporation will be considered payroll costs that can be covered by PPP loan proceeds. How will I be able to obtain forgiveness for my PPP loan? Must not use proceeds for any of the following: Funding for other debts (refinancing, consolidating, or repaying). Your lender may have additional instructions for submitting the PPP loan forgiveness certification. President Jeanne Radsick gives an update on new member for the coronavirus pandemic. We are a technology company that uses software and experience to bring lenders and borrowers together. Applying for the EIDL does not restrict your ability to also apply for the PPP if you are eligible for both. 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. If your loan was too high (for example, if you received more than $20,833 despite not having any employees), then it might not be possible to obtain full forgiveness. Tags: 2030 0 obj <> endobj Yes but borrowers cannot take out an EIDL and a PPP loan for the same purposes. It was very helpful.I have applied for both loan. There are some exceptions, such as for a business with more than 500 employees that is considered small under SBA Size Standards. Its also a time to reflect back on. Although disaster loan assistance is available for up to $2 million, the EIDL for COVID-19 was capped at $150,000. In order to receive a second draw PPP loan, a borrower must: Employ not more than 300 employees. Also, you will want to determine if the lender has a specific timeline indicated in its written materials that promises to provide a response when you submit an application request. Payment deferment means that you are not required to immediately begin making payments to the lender. Most brokers will qualify for EIDLs. SBA will first reach out to EIDL applicants that already received a partial EIDL advance (i.e. This means that you can use the proceeds of the PPP loan to pay your employees, but not any of your agents who are independent contractors. A source for information on applying for LOANS from the SBA's Covid-19 EIDL, reconsideration issues for declined loan applicants, and EIDL increase requests. But before signing on the dotted line, you should be aware of some of the disadvantages of this loan. 2070 0 obj <>stream Businesses that were not in operation on or before February 15, 2020 are not eligible for second draw PPP loans. Eligible entities will be able to receive additional $5,000 grants through this program. Please be advised the lists above may be amended at any time without notice. Your business structure must remain the same for the life of the loan. Economic loss is defined as the amount by which the gross receipts of the covered entity declined during an 8-week period between March 2, 2020 and December 31, 20201, relative to a comparable 8-week period immediately preceding March 2, 2020 or during 2019. For more information on SBA 7(a) loans, please visit https://www.sba7a.loans/sba-7a-loans-small-business-blog/how-do-commercial-real-estate-loans-work. 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. 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. A borrower may submit a loan forgiveness certification or 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. Small Business Loans Guide: Before You Start. 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. Consult with your accountant if you need assistance determining your gross receipts, and/or refer to SBAs FAQ document available here. And because the SBA requires you to save the receipts of any purchases made with EIDL loan monies, you must track these purchases properly. WebI was offered $150k on the Economic Injury Disaster Loan (EIDL) - should I take it? There remain many ambiguous provisions in the laws that continue to be clarified by rule-making at the federal and state agencies. Construction and Real Estate, According to the New York Times, it typically takes one to two weeks for the SBA to make a decision on an application, and up to a week after that for the full loan check to be disbursed. The EIDL loan proceeds may be used for working capital purposes, including payments of fixed debts, payroll, and accounts payable. 2019 or 2020 employer health insurance contributions (health insurance component of Form 1040 Schedule C line 14), retirement contributions (Form 1040 Schedule C line 19), and state and local taxes assessed on employee compensation (primarily under state laws commonly referred to as the State Unemployment Tax Act or SUTA from state quarterly wage reporting forms). The CARES Act II signed on December 27 creates a simplified loan forgiveness application process for loans under $150,000. HUD 223f Loan,HUD 223a7 Loan, %PDF-1.6 % :), Hello! Dadyan and her co-conspirators used dozens of fake, stolen or synthetic identities The CARES II Act created additional targeted EIDL advances for eligible entities located in low-income communities. Low-income community is defined in the Internal Revenue Code as any population census tract where the poverty rate is at least 20 percent, or (i) in the case of a tract not located within a metropolitan area, the median family income for such tract does not exceed 80 percent of statewide median family income; or (ii) in the case of a tract located within a metropolitan area, the median family income for such tract does not exceed 80 percent of the greater of statewide median family income or the metropolitan area median family income. This allows them to overcome one of the largest hurdles their clients face the financing portion of bringing their dream business to life. The SBA has announced that PPP applications will re-open on Friday, January 15, 2021 for certain small lenders (including community banks and credit unions), and applications will reopen on Tuesday, January 19, 2021 for all lenders. Good morning! 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 You should consult with your tax advisor to see how PPP loan forgiveness may affect you and your business. As mentioned earlier, there are a lot of things that you cannot spend EIDL funds on, including employee bonuses, relocation costs, or loan repayments. 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. Your COVID EIDL monthly payments begin 30 months after you first received the funds (see your original loan note for that date). If this amount is over $100,000, reduce it to $100,000. has not paid and will not pay the companies any compensation whatsoever for the level of service they have committed to providing. Below are some resources and links that you can use to find a PPP lender. Read more: PPP eligibility and how small businesses can use the funds. None of the information on this site constitutes legal advice. What can I use the PPP loan proceeds for? A streamlined online application for EIDL loans has been made available by SBA at the following link: Applications for the program must be submitted through a Community Development Financial Institution (CDFI) that has partnered with the state of California to distribute the funds. You'll probably be fine. 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. Do I need to report my receipt of PPP loan proceeds to the EDD if I am receiving PUA or UI benefits? 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. We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Get Quotes. With the adoption of the CARES Act II on December 27, 2020, Congress appropriated additional funds for the EIDL emergency grant program (which had previously run out of funds).
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