Its time for you to get more listings, more leads, and sell more homes in the next 12 months than you did in the last 12 months. 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. Generally, receipts are considered total income (or in the case of a sole proprietorship, independent contractor, or self-employed individual gross income) plus cost of goods sold, and excludes net capital gains or losses as these terms are defined and reported on IRS tax return forms. The expanded Covered Period permitted by the PPP Flexibility Act increases the amount eligible for forgiveness to business owners for cash compensation paid to employees. If you are a sole proprietor or independent contractor without employees, entering 0 on the form will not affect your forgiveness.). 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. Your calculation would look like this: Please note, if your Schedule C business took a loss prior to the COVID-19 pandemic and you had no employees, you will not be considered to have a salary for this calculation. Independent contractors who have been adversely impacted by the COVID-19 emergency are eligible. 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. Best Mortgage Lenders for First-Time Homebuyers. 1. ", For the Emergency Injury Disaster Loan (EIDL):This loan is very different from the Payroll Protection Plan (PPP) because there are very specific things you can cover with this loan. buHX M@B `l&FZ#R ?a When will I know if my PPP loan is forgiven? However, keep in mind that CPAs are allowed to charge fees for advisory services, such as helping you decide which COVID-19 relief program is the best fit for your needs and circumstances. Apartment Loans,HUD Loans, Repayment plans are available up to 30 years as determined on a case-by-case basis. Formula for sole proprietors with employees. The maximum EBL loan term is 7 years. In order to qualify for an SBA 504 loan, businesses must meet a strict set of eligibility requirements: In addition, the prospective borrower applicants must: Real estate agents can take advantage of the Small Business Administration's (SBA) loan programs to help fund their business. Lets say you have a regular, ongoing sole proprietorshipwith no employees, and your businesshas been in operation for at least a full year. Please check this FAQ frequently for updates. 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 SBA is stating that PPP loan forgiveness for payroll costs for sole proprietors without employees is limited to: (i) proprietor expenses when calculating your PPP loan using the gross income formula; and (ii) owner income replacement when calculating your PPP loan using the net profit formula. Any forgiven PPP loan proceeds do not need to be reported as gross income by the borrower for federal and state income taxes. Nevertheless, there are ways for borrowers to achieve full PPP loan forgiveness even if they do not fully restore their workforce. Will I need to pay income tax on the PPP loan proceeds if I use the proceeds for income replacement? will update this section if the state law changes. If you are applying for a second draw PPP loan, the best option may be to work with the lender that provided you with the initial PPP loan. %PDF-1.6 % Check with your lender for specific details on how they will accept applications. 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. Do I have any other options? Updated Aug. 5, 2022 - First published on May 18, 2022. The Express Bridge Loan (EBL) program authorizes SBA express lenders to provide expedited guaranteed bridge loan financing on an emergency basis for disaster-related purposes to small businesses (including sole proprietors, independent contractors and other self-employed individuals) while those small businesses apply for and await long-term financing. In 2020, the CARES Act II reopened the PPP program for those who hadnt taken a PPP loan in the first round, as well as providing for the second draw PPP loans discussed below. Businesses that received a loan subject to the previous limits do not need to submit a request for an increase. The advance face value is Applying for an EBL will be done through your lender. The SBA 7(a) loan is the most commonly used loan program and is incredibly flexible. disclaims any and all liability related to the services provided by the companies on this list. 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. To be eligible for a supplemental targeted advance, an entity must meet all of the criteria above, plus: (1) the entity must employ not more than 10 people; and (2) the entity must have suffered an economic loss greater than 50 percent. How much money can I borrow with a PPP loan? All of the largest banks (such as JPMorgan Chase and Bank of America) are offering PPP loans. The Economic Injury Disaster Loan or EIDL is designed for businesses with fewer than 500 employees. ** C.A.R. 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. Proceeds must be used for purposes approved by the SBA, which include: Improvements to property such as utilities, parking lots, street enhancements, and landscaping, Constructing new facilities or modernizing/renovating existing facilities, Buying machinery and equipment for long-term use. The SBA has released the sample application forms for first and second draw PPP loans: First draw PPP loan borrower application form, First draw PPP loan application for Schedule C Filers Using Gross Income, Second draw PPP loan borrower application form, Second draw PPP loan application for Schedule C Filers Using Gross Income. To apply for an EIDL (Economic Injury Disaster Loan). According to the Wall Street Journal, it usually takes SBA around one month to process a 7(a) loan. This will determine loan amount! Small Business Loans Guide: Before You Start. 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. For annual revenues greater than $1,000,000 up to $2,500,000, the available grant amount is $25,000. 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. Eligibility requirements are fairly broad, so chances are good that your business will qualify if designated as one of the following: The 500-employee maximum applies to all the business types listed above. The lender may require the EBL borrower to pay the loan, in part or in full, if the borrower is approved for long-term disaster financing (such as an EIDL) that allows loan proceeds to be used for EBL loan reimbursement. WebWe have been helping real estate agents and title companies with their foreign national clients for almost 20 years. Compensation may impact the order of which offers appear on page, but our editorial opinions and ratings are not influenced by compensation. 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. If youre an independent contractor, you may be If you have already applied for or received an EIDL loan related to COVID-19 before April 3, 2020 and used the loan proceeds to cover payroll costs, you will be able to refinance the EIDL into a PPP loan for purposes of loan forgiveness. https://www.sba.gov/sites/default/files/2018-06/SOP%2050%2030%209-FINAL.PDF. Best Homeowners Insurance for New Construction, How to Get Discounts on Homeowners Insurance. 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. For small businesses impacted by COVID-19, an EIDL offers some distinct advantages that you should take into account when deciding whether to pursue the loan. SBA will loan borrowers up to $2 million for an initial PPP loan and up to $2 million for a second draw PPP loan. Can I apply for both a PPP loan and an EIDL loan? 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. hello@sba7a.loans, SBA Loan ComparisonSBA 7(a) Loan Fees, Rates, and TermsQualifying for an SBA 7(a) LoanSBA Loan Guides per State, Privacy PolicyTerms of UseAdvertiser Disclosure. 2070 0 obj <>stream If my PPP loan is forgiven, will I still be required to pay interest? Eligible supplier costs include expenditures to a supplier pursuant to a contract, purchase order, or order for goods in effect prior to taking out the loan that are essential to the recipients operations at the time at which the expenditure was made. Effective March 25, 2020, SBA expanded the program to apply nationwide. Before you agree to a loan, be sure that you are aware of and understand EIDL loan terms and requirements adequately. Have used or will use the full amount of their initial PPP loan. Checking vs. Savings Account: Which Should You Pick? The United States and California governments have passed several laws to provide financial relief to small business owners, independent contractors and other unemployed Americans. Chris and Gary, Multifamily Minute Reader Reflections: How Will You Address Vacancy in 2023? Click below for a free, no obligation quote and to learn more about your loan options. A borrower will now be able to receive forgiveness if the borrower signs and submits to the lender a one-page certification form. 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. 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. 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). The following options are available to brokers: Are California Relief Grants available for brokers from the state of California? Apply for a loan in minutes and get multiple quotes today. Gross receipts includes all revenue in whatever form received or accrued (in accordance with the borrowers accounting method) from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances. 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. Eligible entities will be able to receive additional $5,000 grants through this program. This powerful tool is de, If you're a real estate agent, chances are you've heard about the "Big Three" of real estate marketing: buying online leads, door knocking, and cold calling. PPP loan proceeds, EIDL advances, and direct payments from the IRS (e.g., tax refunds, rebates, stimulus or economic impact payments pursuant to the CARES Act) should not be included in gross receipts. Can I receive a targeted EIDL advance if I have not yet applied for an EIDL? As described below, Paycheck Protection Program (PPP) loans are provided on very favorable terms, and they may be the best option for brokers if used to cover payroll and overhead costs. (Note: The SBA wants to collect this information for tracking purposes. If the lender determines that the borrower is entitled to forgiveness of some or all of the loan amount, the lender must request payment from SBA at the time the lender issues its decision. 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, Since this amount (whether you used the gross income or net profit loan calculation method) is equivalent to the maximum PPP loan size for borrowers without employees, these borrowers are able to classify 100% of their PPP loan proceeds as forgivable payroll costs.. 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. Additionally, if the propertys value decreases, you could find yourself underwater on your loan owing more than the property is worth. How much money can I receive for an EIDL loan? For more information about the Loan Necessity Questionnaire, please refer to question #53 of this document. Commercial Real Estate Loans,SBA7a Loans, The full amount of the loan can be up to $500,000, with interest rates of 3.75% for for-profit businesses. Because an EBL loan is a bridge loan, first disbursement of the EBL loan must occur within 45 days of the lenders receipt of an SBA loan number. She previously worked as an accountant. But what if we told you that the, The Commission Calculator is Available NowWe love the holidays at the Paperless Agent. If you're on a Galaxy Fold, consider unfolding your phone or viewing it in full screen to best optimize your experience. 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Where can I find more information about EIDLs? Borrowers with loans greater than $150,000 will need to determine whether they can use the EZ version of the forgiveness application or if they must fill out the full version. The grant amount will be based on the businesss annual revenue as documented in its most recent tax return. 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). The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters. The PPP is particularly attractive because it provides loan forgiveness if you spend the funds on payroll costs and other allowable uses within the first eight weeks of receiving them.