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. 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. In our next piece, we also cover two big tax options real estate brokers can use to provide further relief. Will this affect my PPP application? CMBS Loans, Do I have any other options? Starting the week of April 6, 2021, the SBA is raising the loan limit for the EIDL program from 6 months of economic injury with a maximum loan amount of $150,000 to 24 months of economic injury with a maximum loan amount of $500,000. But before signing on the dotted line, you should be aware of some of the disadvantages of this loan. Lenders are required to issue decisions on borrowers' forgiveness applications to the SBA within 60 days after receiving them. Dadyan and her co-conspirators used dozens of fake, stolen or synthetic identities Real estate agents can use SBA 7(a) loans for buying or maintaining a vehicle, refinancing business debt, and expanding a real estate brokerage. Commercial Real Estate Loans,SBA7a Loans, Im a sole proprietor without employees but indicated on my PPP application that I have 1 employee (myself). Will I need to pay income tax on the PPP loan proceeds if I use the proceeds for income replacement? If someone took the drive-through option literally at your restaurant, you cannot use an EIDL loan to repair the damage. 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Im a sole proprietor whose gross income was more than $150,000 in 2019 or 2020. Many major lenders are currently only assisting borrowers who already have a business checking account with them. Community Banks, Credit Unions and Community Development Financial Institutions**, Search for community banks based on your Zip Code: https://www.icba.org/about/find-a-community-bank, List of credit unions in California: https://www.creditunionsonline.com/california-credit-unions.html, List of community development financial institutions (Excel spreadsheet that you can sort to list California institutions): https://www.cdfifund.gov/Documents/CDFI%20Cert%20List%2004-14-2020%20Final.xlsx, List of 2019 Top 100 U.S Small Business Administration (SBA) Lenders: https://www.sbalenders.com/most-active-sba-banks-in-2019-mid-year-review/, SmartAsset.com evaluation of PPP lenders: https://smartasset.com/insights/ppp-loan-lenders. Formula for sole proprietors with employees. The Economic Injury Disaster Loan (EIDL) program is a loan program guaranteed by the SBA. How will this affect forgiveness? Any forgiven PPP loan proceeds do not need to be reported as gross income by the borrower for federal and state income taxes. How will the decision be made as to who receives a grant? If SBA determines in the course of its review that the borrower was ineligible for the PPP loan based on the provisions of the CARES Act, CARES Act II, SBA rules or guidance available at the time of the borrowers loan application, the loan will not be eligible for loan forgiveness. Additionally, many financial technology (FinTech) companies have started processing PPP loan applications. If you have additional expenses that will not be forgiven if spent with PPP loan proceeds, an Economic Injury Disaster Loan (EIDL) may be a good option. Right now, there are over 2 million Americans with active real estate licenses, and over 1.3 million members of the National Association of Realtors (NAR). When will I know if my PPP loan is forgiven? You'll probably be fine. 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. We are a technology company that uses software and experience to bring lenders and borrowers together. (Note: The SBA wants to collect this information for tracking purposes. 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. For property damage costs: 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 costs were related to property damage and vandalism or looting due to public disturbances that occurred during 2020 and such costs were not covered by insurance or other compensation. The SBA refers to this as owner income replacement. The borrower can spend the owner income replacement portion of the PPP loan on anything the borrower chooses. The following non-payroll costs are forgivable: Eligible mortgage interest costs include payments for any indebtedness or debt instrument incurred in the ordinary course of business that is a liability of the borrower, is a mortgage on real or personal property, and was incurred before February 15, 2020 (but not any prepayment or payment of principal). Check with your lender to determine if you will be required to submit a paper version of the application or if the lender will be offering an electronic application. Real estate agents can use a Small Business Administration (SBA) 7 (a) loan to purchase real estate, buy or construct buildings, modernize their facilities, There is nothing preventing a borrower from spending all PPP loan proceeds immediately upon receipt. How do I calculate my maximum PPP loan amount if I am a sole proprietor with employees? I am a Paperless Agent member. Before taking out a loan, be sure to speak with a qualified commercial real estate broker to discuss all of the risks and benefits associated with this type of financing. How do I calculate my maximum PPP loan amount if I am a sole proprietor without employees? by Mary Girsch-Bock | All Rights Reserved. So, while the housing market may be hot, theres a ton of competition to contend with. Press question mark to learn the rest of the keyboard shortcuts. Great to put this video instruction and helping out. What happens if I previously had an EIDL advance deducted from my PPP loan forgiveness? 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. 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. 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? 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. 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. 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. 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. No. 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. 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. Construction and real estate Since the form is already provided by the borrower at the time the PPP application is submitted, no additional documentation will need to be submitted by the borrower to obtain forgiveness for the portion of the loan used as the borrowers income replacement. 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. 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. Where can I find a step-by-step guide for completing the application? (NOTE: This paragraph does not apply if your loan was under $150,000 and are eligible to fill out the short-form certification.). If you need immediate financial relief, arranging an SBA Express Bridge Loan (EBL) (discussed below) with your lender is a good option. Payment deferment means that you are not required to immediately begin making payments to the lender. Is SIC code 6531 eligible for EIDL loan? Must be able to provide acceptable form of government-issued photo ID. These loans are offered in amounts of up to $350,000. Question: I filed an application with the SBA for the EIDL Advance over a week ago, and received a Confirmation Number stating I would receive an update at the e-mail address I registered with. Webhttps://crumrealestate.comHere is information to help Independent Contractors get through the Coronavirus epidemic. 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. Supplier costs of perishable goods can be made before or during the life of the loan. It is typically offered at much lower interest rates than 7(a) loans. I think only real estate investing is excluded. SBA will loan borrowers up to $2 million for an initial PPP loan and up to $2 million for a second draw PPP loan. 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. We have investments real estate, clothing, watches and other goods. Members electing to report PPP loan proceeds to EDD should do so over 8 weeks following when the loan was disbursed. 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. Most brokers are likely to be eligible for loans which are being made available through the SBA. Yes, in some cases. Borrowers should calculate their maximum loan based on both options to determine which option will provide them with the largest maximum loan. 2030 0 obj <> endobj 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. 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. Legislation and regulation Your business must be an eligible business as determined by the SBA including (but not limited to): Have been in business for a minimum of two years. Any thoughts on what to do here? and An EIDL can help small business owners weather the COVID-19 storm. My Blog eidl for real estate agents This website does not endorse or charge you for any service or product. 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. 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. The United States and California governments have passed several laws to provide financial relief to small business owners, independent contractors and other unemployed Americans. Please check this FAQ frequently for updates. 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. And because the SBA requires you to save the receipts of any purchases made with EIDL loan monies, you must track these purchases properly. It was very helpful.I have applied for both loan. Does the calculation of payroll costs include the amount of commission I pay agents and report on a 1099 form? or its members any referral fee or any other thing of value for being on this list.
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