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. Fill out the form below and a member of our team will get in touch with you. All independent contractors and sole proprietors without employees will be able to use this short certification form, since their loans were capped at $20,833. Borrowers with employees may have costs that fall into this category. What happens if any portion of my PPP loan is not forgiven? (Like an emergency grant that is available within 3 days of applying even if you haven't been approved yet!). The EIDL loan application is streamlined for easy completion. 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. WebComplimentary Self-Defense Class for Real Estate Agents happening at David Hoffman Realty, 10715 Sikes Place, Charlotte, United States on Tue Mar 07 2023 at 10:00 am to or its members any referral fee or any other thing of value for being on this list. These lenders will be handling the PPP application process. I heard that the SBA was offering EIDL emergency grants of up to $10,000 that did not need to be repaid. 2070 0 obj <>stream Many brokers structure their businesses as S Corporations and pay themselves salaries from the corporations funds. Construction and Real Estate, Your net profit for 2019 was $230,000. How do I calculate my maximum PPP loan amount if I am a sole proprietor with employees? If the borrower applies for forgiveness before the end of the Covered Period and has reduced any employees salaries or wages in excess of 25%, the borrower must account for the excess salary reduction for the full Covered Period. The lender is responsible for notifying the borrower of the forgiveness amount after the SBA makes its decision. 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. are not eligible for multiple grants and are only allowed to apply once using their eligible small business with the highest revenue. If you only have a personal checking account, these lenders will still not accept your PPP application. All of the largest banks (such as JPMorgan Chase and Bank of America) are offering PPP loans. The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters. This can include payroll tax filing reported (or that will be reported) to the IRS (typically, Form 941); and state quarterly business and individual employee wage reporting and unemployment insurance tax filings reported (or that will be reported) to the relevant state. 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. (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. Please be advised that you are not required to seek services from any of the companies suggested. recommends seeking a CPA to provide that assistance. Step 4: Add the outstanding amount of any EIDL made between January 31, 2020 and April 3, 2020 that you seek to refinance, less the amount of any advance under an EIDL COVID-19 loan (because it does not have to be repaid). 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. A California law passed on September 9 stated that expenses paid with forgiven PPP loan proceeds cannot be deducted for state income taxes. C.A.R.s Guidance for Employers regarding the COVID-19 situation provides more information on the FFRCA sick leave tax credits.). Heres the simplified three-step process: Heres an example of the PPP loan calculation in action. Image source: Author. If this amount is zero or less, you are not eligible for a PPP loan. Tue Mar 07 2023 at 10:00 am to 12:00 pm. 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. See Question 3A. abnormally high interest rates or fees), you may be able to use an SBA 7(a) loan to refinance it. Any forgiven PPP loan proceeds do not need to be reported as gross income by the borrower for federal and state income taxes. SBA 7(a) Loans is a 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. From March 5 to March 11, grants will be awarded to waitlisted businesses that applied during the previous application rounds, but new applications will not be accepted during this round. Calculating how much youre entitled to as an independent contractor has a formula to it. Real estate agents can use a Small Business Administration (SBA) 7 (a) loan to purchase real estate, buy or construct buildings, modernize their facilities, Government guarantee of a loan means that the government assumes the debt obligation for the loan if the borrower defaults. Go to your Schedule C (Form 1040) and find your net profit on line 31. A default loan term of 2 years for loans dispersed prior to the enactment of the PPP Flexibility Act, and 5 years for loans dispersed after the enactment of the PPP Flexibility Act. Additionally, there is no requirement that a borrower must pay themselves in equal weekly installments to obtain loan forgiveness. The application date is May 2, 2020. Is SIC code 6531 eligible for EIDL loan? CARES Act II provides that EIDL advances will no longer be deducted from PPP loan forgiveness. Real Estate Agents and Managers Where can I find a step-by-step guide for completing the application? However, emergency grants will now be targeted, meaning that the eligibility criteria are more restrictive. How much money can I borrow with a PPP loan? Learn more about this loan, including qualifications and how to apply. 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. WebWe have been helping real estate agents and title companies with their foreign national clients for almost 20 years. 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. Both of these loan programs offer a number of advantages for real estate agents. Must be able to provide acceptable form of government-issued photo ID. 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. Hope this helps! 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. The full amount of the loan can be up to $500,000, with interest rates of 3.75% for for-profit businesses. The SBA has an online guide, which is available here: https://www.sba.gov/funding-programs/disaster-assistance. The Economic Injury Disaster Loan or EIDL is designed for businesses with fewer than 500 employees. 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. 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. 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. For more information about the Loan Necessity Questionnaire, please refer to question #53 of. So, while the housing market may be hot, theres a ton of competition to contend with. What expenses can I spend the PPP loan proceeds on if I want the loan to be forgiven? hb```f`` P @1V@NTYaR |JRn:Z 3Ap {/#OyCmc.\3YEYYK)pK/a\/X"R%-&iRmR#P%,.3/ :) u8NeHsd"Hv"3]APD3Jt @d(b .H"J6GGa"+@Z%"EC!Qqp(@pM*00^x*Z;hh20j Small Business Loans Guide: Before You Start. I have yet to see an actual list of ineligible codes, but "Real Estate Developer" is for sure on the list as ineligible, you want to make sure you can be distinguished from that. 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. The deadline applies for both first and second draw PPP loans. 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. Check with your bank to determine if it is currently offering EBLs and to see if you qualify. We have investments real estate, clothing, watches and other goods. 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. Since then "crickets", and no $$$ in my bank account. Apply for a loan in minutes and get multiple quotes today. Please check this FAQ frequently for updates. Multifamily Minute Reader Reflections: How Will You Address Vacancy in 2023? 6401 Congress Ave Ste 250Boca Raton FL 33487 The Covered Period cannot extend beyond September 30, 2021. This second loan is called a second draw PPP loan.. However, EDD suggests it is safer to do so. CMBS Loans, One was a schedule of liabilities. Subscribe to Real Estate & Land Use Section news Yes, but the borrower may include only the share of covered non-payroll expenses that were deductible on the borrowers 2019 or 2020 tax filings. 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. To verify payroll costs, you must submit the following documents along with your PPP Loan Forgiveness Application: Bank account statements or third-party payroll service provider reports documenting the amount of Cash Compensation paid to employees. 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. Best Homeowners Insurance for New Construction, How to Get Discounts on Homeowners Insurance. They have not started distributing any money yet, and we have not been informed as to when that might happen. HUD 232 Loan, The CARES Act has created the Paycheck Protection Program (PPP), an expansion of SBAs 7(a) loan program for providing financial assistance to small businesses. 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. Borrowers must make a good-faith certification that the PPP loan is necessary and should document those needs with the filing of the application. 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? What Types of Homeowners Insurance Policies Are Available? Step 2: Calculate the average monthly amount (divide the amount from Step 1 by 12). The CARES Act II signed on December 27 creates a simplified loan forgiveness application process for loans under $150,000. 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. | Terms & Conditions, $20,833.33 initial loan and $20,833.33 second draw loan for independent contractors without employees. We can help you determine which program would be the right fit for your business, as well as determine the appropriate loan amount. Most brokers are likely to be eligible for loans which are being made available through the SBA. 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. This website does not endorse or charge you for any service or product. Eligible property damage costs include costs related to property damage due to public disturbances that occurred during 2020 that are not covered by insurance. Step 4: Add the outstanding amount of any Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020 that you seek to refinance, less the amount of any advance under an EIDL COVID-19 loan (because it does not have to be repaid). 1. For annual revenue of $1,000 to $100,000, the available grant amount is $5000. Yes but borrowers cannot take out an EIDL and a PPP loan for the same purposes. Press J to jump to the feed. 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. 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. And, if youre a real estate agent or realtor looking to get an edge over the competition, getting an SBA loan could be great way to do so. Borrowers with loans of $150,000 or greater will need to submit additional documentation to obtain forgiveness. The real estate industry was adversely affected by statewide and local orders that were put in place in response to the COVID-19 pandemic. 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. Payment deferment means that you are not required to immediately begin making payments to the lender. 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. Press question mark to learn the rest of the keyboard shortcuts. Am I eligible for a PPP loan if I structure my business as an S Corp? Must currently be operating or have a clear plan to re-open once the State of California permits re-opening of the 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. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team. Repayment plans are available up to 30 years as determined on a case-by-case basis. As an Ebby Halliday client, youll benefit from knowledgeable, respected agents and a team of trusted professionals dedicated to making buying or selling your However, there are some PPP lenders, such as community banks, that are willing to take new customers. Do I need to report my receipt of PPP loan proceeds to the EDD if I am receiving PUA or UI benefits? But you can qualify for those programs, even if you have no employees. If you need immediate financial relief, arranging an SBA Express Bridge Loan (EBL) (discussed below) with your lender is a good option. If your business has been hurt by COVID-19, it may be worth applying for an EIDL loan. Consult with your accountant if you need assistance determining your gross receipts, and/or refer to SBAs FAQ document available here. 2021Copyright CALIFORNIA ASSOCIATION OF REALTORS. The SBA instituted this rule to serve as an additional deterrent to fraud, waste, and abuse. Copyright, Trademark and Patent Information, An individual who operates as a sole proprietorship or as an independent contractor, A private nonprofit organization that is a nongovernmental agency or entity, Any illegal activity as defined by the federal government, Any activities of a prurient sexual nature, Earning more than one-third of its gross income from legal gambling activities. I think my lender allowed my loan amount to be too high. The Act extends the deadline to apply for a PPP loan to May 31, 2021. 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 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. Are these grants still available? 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. Though SBA disaster loans have been available for years, the EIDL was signed into law in March of 2020 as part of the CARES Act, which was passed by Congress to provide emergency relief to American workers and small businesses struggling to survive due to the impact of COVID-19. In order to receive a second draw PPP loan, a borrower must: Employ not more than 300 employees. C.A.R. The one-page certification form requires the borrower to provide: The number of employees retained by use of the loan. The EIDL has a 30-year repayment plan, and there is no prepayment penalty if you decide to pay early. Thus, most real estate industry borrowers should be able to truthfully certify that they were unable to operate at the same level of business activity during the Covered Period as they were able to prior to February 15, 2020. According to court documents, Dadyan was a member of a Los Angeles-based fraud ring that schemed to fraudulently obtain more than $20 million in Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) COVID-19 relief funds. 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. Which of the SBA loans should I apply for? To apply for forgiveness of your PPP loan, you must complete the certification and submit it to your lender. C.A.R. 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. 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. With all of the information floating around about stimulus packages and loans, you're probably wondering what this bail out means to you, as a real estate agent, and how you can get access to YOUR stimulus money We want to make sure you know exactly how to get the support you need and how to get it the right way, so we asked the experts to explain it to us, and boy did they deliver. Im a sole proprietor without employees but indicated on my PPP application that I have 1 employee (myself). 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. The SBA prohibits you from obtaining an EIDL loan if your business engages in any of the following activities: Other things that may disqualify you from obtaining an EIDL loan is if any principal owner with a 50% or greater interest in your business is more than 60 days late on child support obligations. Any new loan applications and any loans in process when the new loan limits are implemented will automatically be considered for the 24 months of economic injury up to a maximum of $500,000.