Additionally, per the SBAs Interim Final Rule, sole proprietors must have claimed or been able to claim these expenses as deductible on their 2019 or 2020 IRS Form 1040 Schedule C in order for them to be forgivable when paid with PPP loan proceeds. SBA 7(a) Loans is a Its also important to understand that if you do pledge collateral, youre placing a lot of temporary restrictions on your business including the stipulation that while your loan is still outstanding, you cannot sell, lease, or transfer any collateral that was used as a loan guarantee without the approval of the SBA. The funds can be used for land, improvements, construction, retrofitting, and more. But the funds that were set aside to cover the advance were quickly depleted, with the SBA discontinuing the advances in July of 2020. SBA will first reach out to EIDL applicants that already received a partial EIDL advance (i.e. Underserved small business groups served by the state-supported network of small business centers (i.e., businesses majority owned and run on a daily basis by women, minorities/persons of color, veterans and businesses located in low-to-moderate income and rural communities). You should consult with your tax advisor to see how PPP loan forgiveness may affect you and your business. The EIDL loan proceeds may be used for working capital purposes, including payments of fixed debts, payroll, and accounts payable. "Payroll costs" include net profit of independent contractors. I am a Paperless Agent member. Press inquiries may be directed to Media Relations. How Much Does Home Ownership Really Cost? SBA has not yet announced when these remittances will occur. In addition, the loan immediately goes into deferment, so you have a year before you need to start repaying the loan, although the SBA gives you the option to start repaying it immediately. What is an Economic Injury Disaster Loan, and who qualifies? If youre an independent contractor, you may be under the impression that the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program dont apply to you. C.A.R.s Guidance for Employers regarding the COVID-19 situation provides more information on the FFRCA sick leave tax credits.). 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. Multifamily Minute Reader Reflections: When Do You Start the Refi Process? Additionally, the American Rescue Plan created a new supplemental targeted advance program. The tests cover such subjects as forms of ownership, physical descriptions, valuation and regulation. Because of the current application backlog, application approvals are likely to be significantly delayed. 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. Below are some resources and links that you can use to find a PPP lender. Use r/TargetedEIDL for advance/grant issues. Which of the SBA loans should I apply for? 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. How do I calculate my maximum PPP loan amount if I am a sole proprietor without employees? 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. And because the SBA requires you to save the receipts of any purchases made with EIDL loan monies, you must track these purchases properly. Licensed real estate agents are statutory nonemployees and are treated as self-employed for all Federal tax purposes, including A government guarantee reduces the risk to the borrower. Agents may qualify for their own PPP loans. For annual revenues greater than $1,000,000 up to $2,500,000, the available grant amount is $25,000. What assistance is available for brokers from the SBA? As of April 24, 2020, an additional $50 billion was allocated to EIDLs and an additional $10 billion was allocated for EIDL grants. SBA will reach out directly via email and provide more details about how businesses can request an increase close to the April 6 implementation date. Your business structure must remain the same for the life of the loan. Best Mortgage Lenders for First-Time Homebuyers. If you would like to submit content or write an article for the Real Estate & Land Use Section, please email Kara Sikorski at ksikorski@indybar.org. The PPP loan program expired as of June 30, 2020, but was extended on July 4, 2020 to August 8, 2020 and there was approximately $130 billion available as of that date. How long will it take for me to get an EBL after I apply? If someone took the drive-through option literally at your restaurant, you cannot use an EIDL loan to repair the damage. California has announced a new relief grant program for small businesses affected by the COVID-19 pandemic. Alternatively, you can submit lessor account statements from February 2020 and from the Covered Period through one month after the end of the Covered Period verifying eligible payments. For a complete FAQ about the California COVID-19 relief grant program, please refer to this page: 2021Copyright CALIFORNIA ASSOCIATION OF REALTORS. What Is the EIDL Loan Program? All of the largest banks (such as JPMorgan Chase and Bank of America) are offering PPP loans. Repayment plans are available up to 30 years as determined on a case-by-case basis. 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. 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. Can a sole proprietor include a prorated portion of their home mortgage interest payments, home rent payments, and/or home utility bills as eligible non-payroll expenses if they have a home office and deduct these expenses on their IRS Form 1040 Schedule C? Applying for an EBL will be done through your lender. 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. What should I look out for? SBA will, subject to any SBA review of the loan or loan application, remit the appropriate forgiveness amount to the lender, plus any interest accrued through the date of payment, not later than 90 days after the lender issues its decision to SBA. 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). As real estate agents, we are exactly who these legislations were designed to help. Formula for firms to determine eligible loan amount: Step 1: Compute 2019 or 2020 payroll by adding the following: 2019 or 2020 gross wages and tips paid to your employees whose principal place of residence is in the United States computed using 2019 or 2020 IRS Form 941 Taxable Medicare wages & tips (line 5c- column 1) from each quarter plus any pre-tax employee contributions for health insurance or other fringe benefits excluded from Taxable Medicare wages & tips; subtract any amounts paid to any individual employee in excess of $100,000 annualized and any amounts paid to any employee whose principal place of residence is outside the United States; and. Are they looking for my tax deductions? For second draw PPP loans of not more than $150,000, borrowers must submit documentation sufficient to establish that they experienced a reduction in revenue. This allows them to overcome one of the largest hurdles their clients face the financing portion of bringing their dream business to life. Nevertheless, there are ways for borrowers to achieve full PPP loan forgiveness even if they do not fully restore their workforce. Applying for the EIDL does not restrict your ability to also apply for the PPP if you are eligible for both. Step 3: Multiply the average monthly gross income or net profit amount from Step 2 by 2.5. Read through - EIDL eligibility criteria starts at page 64. 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. The borrower can spend the owner income replacement portion of the PPP loan on anything the borrower chooses. WebTake this free practice test to see how prepared you are for a real estate agent certifying exam. The risks associated with taking out a small business loan for real estate agents include the possibility of monthly payments increasing significantly at the end of the interest-only period when you are required to start paying both principal and interest. You tax returns schedule C they will correlate with your profit and loss! Loan forgiveness means that you are not required to repay your loan. After 14 Days it's just $67/month! All Before you apply for a PPP loan, it is important to review the options with your CPA or financial advisor. This website does not endorse or charge you for any service or product. buHX M@B `l&FZ#R ?a 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. 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. 2030 0 obj <> endobj We have not reviewed all available products or offers. 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. The Economic Injury Disaster Loan or EIDL is designed for businesses with fewer than 500 employees. What are the risks if I do? HUD 221d4 Loan, The companies will not pay C.A.R. Supplier costs of perishable goods can be made before or during the life of the loan. Its a time for family, friends and creating lasting memories. Additionally, if the propertys value decreases, you could find yourself underwater on your loan owing more than the property is worth. C.A.R. Economic Injury Disaster Loans (EIDLs) are targeted, low-interest loans to small businesses that have been severely impacted by the coronavirus. 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. 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).
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