Commercial Real Estate Loans,SBA7a Loans, The only portion of the loan that was able to be forgiven was the advance, which is no longer available. Learn more about this loan, including qualifications and how to apply. These loans are offered in amounts of up to $350,000. Please be advised that you are not required to seek services from any of the companies suggested. Thats why the EIDL loan application is such a pleasant surprise. CPA Tax Services. Get referrals from family or friends who have used an agent or look for one who is active in the neighbourhood in which you are selling or buying. The EIDL has a 30-year repayment plan, and there is no prepayment penalty if you decide to pay early. 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. Where can I find more information about EBLs? For businesses established after the third quarter of 2019, the SBA compares revenue from any 2020 quarter to the fourth quarter of 2019. SBA 504 loans are intended for the purchase and construction of owner-occupied commercial real estate, not working capital, and are typically offered at much lower interest rates than 7(a) loans. https://careliefgrant.com/wp-content/uploads/2020/12/FOR-WEBSITE-ONLY-CRG-All-Businesses-Program-and-Application-Guide-Public.pdf. Alternatively, you can submit lender account statements from February 2020 and the months of the Covered Period through one month after the end of the Covered Period verifying interest amounts and eligible payments. You should consult with your tax advisor to see how PPP loan forgiveness may affect you and your business. 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. between $1,000 - $9,000) and will later reach out to those who applied for EIDL assistance on or before December 27, 2020 but did not receive an EIDL advance due to lack of program funding. Technology 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 $100,000 annually as pro-rated during the covered period,(February 15, 2020-June 30,2020). Applicants will be contacted directly by SBA via email in the coming weeks with instructions to determine eligibility and submit documentation. 1. (Note: Sick leave tax credits under the Families First Coronavirus Response Act (FFCRA) are not included as payroll costs that can be paid with a PPP loan. hbbd``b`~$ *3z B $b .H "AG Effective March 25, 2020, SBA expanded the program to apply nationwide. Repayment plans are available up to 30 years as determined on a case-by-case basis. This website is owned by a private company that offers business advice, information and other services related to multifamily, commercial real estate, and business financing. Real-estate brokers, are you looking for clarity around what help youre eligible for during the COVID-19 crisis? The remainder of the loan that is not forgiven (if any) will operate according to the loan terms described in the Loan Terms section above. Consult with your accountant if you need assistance determining your gross receipts, and/or refer to SBAs FAQ document available here. 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. Option 1: Economic Injury Disaster Loans (EIDL) Businesses with 500 or fewer employees including sole proprietors, independent contractors and cooperatives I tried to apply for a PPP loan at my bank, but the bank refused to consider my application or rejected it. 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. Must not use proceeds for any of the following: Funding for other debts (refinancing, consolidating, or repaying). 6401 Congress Ave Ste 250Boca Raton FL 33487 When the EIDL loan was first offered, business owners were given an option to apply for a loan advance that the SBA would consider a grant, provided that all the necessary criteria were met. 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. First, shop around! From March 25 to March 31, there will be another application round where businesses that have not yet applied for a grant will be permitted to apply. More information about PPP loan forgiveness can be found in the Loan Forgiveness section of the FAQ. Great to put this video instruction and helping out. None of the information on this site constitutes legal advice. 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What Types of Homeowners Insurance Policies Are Available? If you need to visit the SBA directly please click here: sba.gov. We recommend putting the PPP loan funds into a separate bank account to make it easier to track them. Licensed real estate agents are statutory nonemployees and are treated as self-employed for all Federal tax purposes, including Best Mortgage Lenders for First-Time Homebuyers. Borrowers with loans under $150,000 who fill out the short-form certification will not need to submit additional documentation to obtain forgiveness. Unlike the PPP loan, EIDL loan forgiveness is not an option. So whatever you do, make sure you are applying for these stimulus packages and make sure a professional is helping you so you can make sure you are doing this right and getting the most out of it. 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. 2054 0 obj <>/Filter/FlateDecode/ID[<8C8FAFB2856FD243BB76F15BC6E77F5A>]/Index[2030 41]/Info 2029 0 R/Length 108/Prev 228727/Root 2031 0 R/Size 2071/Type/XRef/W[1 2 1]>>stream 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. Thank You so much. The funds can be used for land, improvements, construction, retrofitting, and more. We will provide additional information and guidance if it becomes available. Press J to jump to the feed. Read more: PPP eligibility and how small businesses can use the funds. 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. If a Schedule C filer elects to use gross income to calculate its loan amount on a First Draw PPP Loan, and the borrower reported more than $150,000 in gross income on the Schedule C that was used to calculate the borrowers loan amount, the borrower will not automatically be deemed to have made the statutorily required certification concerning the necessity of the loan request in good faith, and the borrower may be subject to a review by SBA of its certification. Below are some resources and links that you can use to find a PPP lender. In 2017, over 6 million homes were sold across the United States, and nearly 90% of sellers used a real estate agent to help them through the process. SBA will loan borrowers up to $2 million for an initial PPP loan and up to $2 million for a second draw PPP loan. Most brokers are likely to be eligible for loans which are being made available through the SBA. To verify payroll costs, you must submit the following documents along with your PPP Loan Forgiveness Application: 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. What is a second draw Paycheck Protection Program loan, and who qualifies? You will need to provide the following information as part of the application process: General information about the business, including EIN (or SSN for a sole proprietorship), Gross revenues for the 12 months prior to the date of the disaster (which SBA designates as Jan. 31, 2020), Cost of goods sold for the 12 months prior to the date of the disaster, Personal and contact information for business owners, Information about where to send funds (bank name, account number, and routing number). However, if you run a larger brokerage that wants to use an SBA loan to purchase (or even build) a new headquarters, an SBA 504 loan could be a superior option. Right now, the EIDL can cover up to six months of working capital or operating expenses, with a cap of $150,000, provided that your business qualifies. If you have the documentation available when applying for the loan, submitting it when applying will be preferable since it will simplify the forgiveness process once you reach that stage. 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. Have used or will use the full amount of their initial PPP loan. If you qualify, filling out the EZ version of the loan forgiveness application is the preferred option because it is shorter and less complicated than the full application. 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. 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. 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. Check with your lender to determine if you will be required to submit a paper version of the certification or if the lender will be offering an electronic certification. Payment receipts, cancelled checks, or account statements documenting the amount of any employer contributions to employee health insurance and retirement plans that you included in the loan forgiveness amount. The following options are available to brokers: Are California Relief Grants available for brokers from the state of California? If a Schedule C filer elects to use gross income to calculate its loan amount on a First Draw PPP Loan, and the borrower reported more than $150,000 in gross income on the Schedule C that was used to calculate the borrowers loan amount, the borrower will not automatically be deemed to have made the statutorily required certification concerning the necessity of the loan request in good faith, and the borrower may be subject to a review by SBA of its certification. 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. 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. What happens if I previously had an EIDL advance deducted from my PPP loan forgiveness? Is SIC code 6531 eligible for EIDL loan? 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. 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. You cannot request the specific amount of the loan - instead, the SBA determines how much you can borrow using a formula intended to approximate 24 months of your operating expenses. WebTake this free practice test to see how prepared you are for a real estate agent certifying exam. Proprietor expenses are defined as business expenses plus owner compensation and are calculated based on a proportionate share of the borrowers 2019 or 2020 gross income, as reflected in the individuals 2019 or 2020 Form 1040 Schedule C. Owner income replacement is calculated based on a proportionate share of the borrowers 2019 or 2020 net profit, as reflected in the individuals 2019 or 2020 Form 1040 Schedule C. The SBA has clarified that borrowers can now attribute up to 2.5 times their 2019 or 2020 IRS Form 1040 Schedule C average monthly gross income as proprietor expenses and up to 2.5 times average monthly net profit as owner income replacement.. If I'm on Disability, Can I Still Get a Loan? If you don't have one. 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. If you need assistance completing the PPP application, C.A.R. If I previously applied for a PPP loan and calculated my loan amount based on net profit, can I now reapply based on a gross income calculation? In our next piece, we also cover two big tax options real estate brokers can use to provide further relief. However, there are some PPP lenders, such as community banks, that are willing to take new customers. To apply for a PPP (Payroll Protection Plan), you must go through an approved SBA loan provider. No. Image source: Author. Are they looking for my tax deductions? and No. Fill out the form below and a member of our team will get in touch with you. Real estate agents can use SBA 7(a) loans for buying or maintaining a vehicle, refinancing business debt, and expanding a real estate brokerage. 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). Additionally, if the propertys value decreases, you could find yourself underwater on your loan owing more than the property is worth. There are strict guidelines about what you can and cannot use EIDL loans for. The SBA refers to this as owner income replacement.. 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 SBA is launching a new round of economic injury disaster loan (EIDL) Advances called Targeted EIDL Advance which provides eligible businesses with 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. 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. What is an SBA Express Bridge Loan, and who qualifies? 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. Businesses with fewer than 500 employees including sole proprietors, independent contractors, and other self-employed individuals all qualify for initial PPP loans. company. 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. Applications will be reviewed to determine whether the applicant meets the eligibility requirements. In addition, all state, local, and municipal government entities are prohibited from applying for an EIDL loan, as are all members of Congress. Your business structure must remain the same for the life of the loan. The proprietor expenses or owner income replacement portion of the PPP loan can be spent by the borrower on anything, at any time. Updated Aug. 5, 2022 - First published on May 18, 2022. Click here to read our full review for free and apply in just 2 minutes. Before you agree to a loan, be sure that you are aware of and understand EIDL loan terms and requirements adequately. Between March 2020 and February 2021, SBA provided about 3.8 million low-interest EIDL loans and 5.8 million grants (called advances) totaling $224 billion to help EIDL loans carry a low interest rate and a 30-year repayment term and can offer a lifeline to struggling small businesses. :), Hello! PPP applications already reopened the week of January 11 for community development financial institutions. 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 Borrowers must make a good-faith certification that the PPP loan is necessary and should document those needs with the filing of the application. EMERGENCY INJURY DISASTER LOAN (EIDL) APPLY HERE: Application period OPENPAYROLL PROTECTION PLAN (PPP) FIND A LENDER: Application period begins April 10th, Economic Injury Disaster Load Emergency AdvancePayroll Protection Plan (PPP) OverviewPayroll Protection Plan (PPP) Fact Sheet. 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. Supplier costs of perishable goods can be made before or during the life of the loan. For rent or lease payments: Copy of current lease agreement and receipts of cancelled checks verifying eligible payments from the Covered Period. The United States and California governments have passed several laws to provide financial relief to small business owners, independent contractors and other unemployed Americans. 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. Click below for a free, no obligation quote and to learn more about your loan options. Pursuant to guidance from the Department of the Treasury, CPAs are not supposed to charge fees for assistance in preparation of a PPP loan application. If you obtain an EIDL loan for more than $25,000, you will need to pledge business collateral to guarantee the loan. What is an initial Paycheck Protection Program loan, and who qualifies? Please see the following statements C.A.R. 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. SBA 504 loans are intended for the purchase and construction of owner-occupied commercial real estate, not working capital, and are typically offered at much lower interest rates than 7(a) loans. 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. You could, if desired, get a PPP loan to cover payroll costs (defined below) and other costs that are forgivable under the PPP, and then get an EIDL loan to cover some of your other expenses. Chris and Gary, Because the cap limit is $100,000, if your net profit is over that, you have to reduce it to $100,000. 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. As long as you did not receive a larger PPP loan than you are eligible for, this should not have any impact on loan forgiveness. There is currently no official guidance from the EDD as to whether PPP loan proceeds need to be reported as income when you are certifying for PUA or UI. The CARES Act II signed on December 27 creates a simplified loan forgiveness application process for loans under $150,000. You cannot apply for PPP loans on the SBA website. If my PPP loan is forgiven, will I still be required to pay interest? The eligibility requirements for a second draw PPP loan are different than the requirements for an initial PPP loan. 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. How much money can I borrow with a PPP loan? We offer property tax relief to help you avoid penalties, collection 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:https://www.sba.gov/paycheckprotection/find. The SBA instituted this rule to serve as an additional deterrent to fraud, waste, and abuse. "Payroll costs" include net profit of independent contractors. Mary Girsch-Bock is the expert on accounting software and payroll software for The Ascent. Additionally, no collateral is required to obtain a loan, and there is no personal guarantee requirement. Borrowers with employees may have costs that fall into this category. 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. Construction and Real Estate, Many major lenders are currently only assisting borrowers who already have a business checking account with them. Lenders are required to issue decisions on borrowers' forgiveness applications to the SBA within 60 days after receiving them. Any EIDL Advance Amounts previously deducted from a borrowers forgiveness amount will be remitted to the lender, together with interest to the remittance date. 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