Please see the following statements C.A.R. 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. Please be advised the lists above may be amended at any time without notice. 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). 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. To further ensure PPP loan forgiveness, its important to keep detailed records so you can track where the funds went. WebThe standard, fair commission for a real estate agent is 6% of the home's sale price. Real Estate Agents and Managers. Click here to read now. 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). In our next piece, we also cover two big tax options real estate brokers can use to provide further relief. Yes but borrowers cannot take out an EIDL and a PPP loan for the same purposes. 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. I'm a Paperless Agent subscriber and appreciate ALL the information and support you provide us with - THANK YOU! Payroll costs also do not include: Compensation of an individual employee in excess of an annual salary of $100,000; employer-side payroll taxes, railroad retirement taxes, and income taxes; any compensation of an employee whose principal place of residence is outside of the US; and qualified sick or family leave wages for which a credit is allowed under the Families First Coronavirus Response Act. You must also provide a 2019 or 2020 IRS Form 1099-MISC (depending on which year you used to calculate your maximum loan amount) detailing nonemployee compensation received (box 7), or an invoice, bank statement, or book of record that establishes you are self-employed. EIDL The lender is responsible for notifying the borrower of the forgiveness amount after the SBA makes its decision. 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. According to the Wall Street Journal, it usually takes SBA around one month to process a 7(a) loan. A California law passed on September 9 stated that expenses paid with forgiven PPP loan proceeds cannot be deducted for state income taxes. 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. What happens if any portion of my PPP loan is not forgiven? 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). Im a sole proprietor without employees but indicated on my PPP application that I have 1 employee (myself). Required fields are marked *. Calculating how much youre entitled to as an independent contractor has a formula to it. Entities eligible for a supplemental targeted advance will be able to receive an additional $5,000 grant. Copyright 2022 Janover Inc. All rights reserved. In addition to revising the. The real estate industry was adversely affected by statewide and local orders that were put in place in response to the COVID-19 pandemic. The Economic Injury Disaster Loan or EIDL is designed for businesses with fewer than 500 employees. Normal operating expenses generally dont go on that form unless they are past due, http://sbaloanforms.com/blog/sba-form-2202-schedule-of-liabilities.html. Real estate agents can use SBA 7(a) loans for buying or maintaining a vehicle, refinancing business debt, and expanding a real estate brokerage. 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. We are a technology company that uses software and experience to bring lenders and borrowers together. All After that, PPP loans are 75% guaranteed for loans exceeding $150,000 and 85% guaranteed for loans equal to or less than $150,000. or its members any referral fee or any other thing of value for being on this list. I tried to apply for a PPP loan at my bank, but the bank refused to consider my application or rejected it. 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. "Payroll costs" include net profit of independent contractors. When can I submit my loan forgiveness certification or application? To apply for a PPP (Payroll Protection Plan), you must go through an approved SBA loan provider. By accepting all cookies, you agree to our use of cookies to deliver and maintain our services and site, improve the quality of Reddit, personalize Reddit content and advertising, and measure the effectiveness of advertising. Updated Aug. 5, 2022 - First published on May 18, 2022. Therefore, it will be more difficult for you to represent that the pandemic itself has had an adverse impact on your business. Save my name, email, and website in this browser for the next time I comment. CMBS Loans, I am a Paperless Agent member. Will employees need to pay taxes on the proceeds that they receive? Cybersecurity CARES Act II provides that EIDL advances will no longer be deducted from PPP loan forgiveness. Additionally, there is no requirement that a borrower must pay themselves in equal weekly installments to obtain loan forgiveness. 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. 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. Before you agree to a loan, be sure that you are aware of and understand EIDL loan terms and requirements adequately. 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. Reddit and its partners use cookies and similar technologies to provide you with a better experience. How long will it take for me to get an EBL after I apply? PPP applications already reopened the week of January 11 for community development financial institutions. Prior to May 4, the SBA had closed EIDL applications in order to work through the previous application backlog. The proprietor expenses or owner income replacement portion of the PPP loan can be spent by the borrower on anything, at any time. If the eligible entity has previously applied for EIDL assistance on or before December 27, 2020 but has not yet received an EIDL advance, the entity will be eligible to receive a grant of $10,000. WebI was offered $150k on the Economic Injury Disaster Loan (EIDL) - should I take it? No; however, emergency grant portion does not need to be repaid, $500,000; eligible borrowers can ask for "targeted" emergency grant of up to $15,000, Working capital purposes, including payment of fixed debts, payroll, and accounts payable, "Disaster-related purposes" to support the survival and/or reopening of the small business. With the adoption of the CARES Act II on December 27, 2020, Congress appropriated additional funds for the EIDL emergency grant program (which had previously run out of funds). 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. First, shop around! How will this affect forgiveness? 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. Fill out the form below and a member of our team will get in touch with you. SBA will first reach out to EIDL applicants that already received a partial EIDL advance (i.e. Head to the COVID Legal Documents page on car.org for access to: Step-by-Step Guide to PPP Loan Forgiveness for Borrowers With Employees, Step-by-Step Guide to PPP Loan Forgiveness for Borrowers Without Employees. 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. Must be impacted by COVID-19 and the health and safety restrictions such as business interruptions or business closures incurred as a result of the COVID-19 pandemic. Likewise, if your deep fryer goes on the fritz, or your roof springs a leak, youll have to rely on other funds to take care of those repairs. Please be advised that you are not required to seek services from any of the companies suggested. Borrowers with loans of $150,000 or greater will need to submit additional documentation to obtain forgiveness. When do I have to begin and end using PPP loan proceeds to qualify for forgiveness? Real-estate brokers, are you looking for clarity around what help youre eligible for during the COVID-19 crisis? Any EIDL Advance Amounts previously deducted from a borrowers forgiveness amount will be remitted to the lender, together with interest to the remittance date. 1. To identify which program(s) youre eligible for, work with your lawyer and an accountant like Wipfli. We will continue to update this FAQ as any rules or other guidance are provided. Best Homeowners Insurance for New Construction, How to Get Discounts on Homeowners Insurance. Our accounting firm speculates it could be another 3-4 weeks. Many major lenders are currently only assisting borrowers who already have a business checking account with them. The EIDL has a 30-year repayment plan, and there is no prepayment penalty if you decide to pay early. 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. SBA express loans are a variant of the SBA 7(a) loan that can be approved faster. The loan quote represents the amount that youre qualified to borrow, but you can change the amount when you electronically sign the application. Apartment Loans,HUD Loans, 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. 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. Members electing to report PPP loan proceeds to EDD should do so over 8 weeks following when the loan was disbursed. Weve all come to expect an overly complicated process when it comes to anything associated with government programs. Do I need to report my receipt of PPP loan proceeds to the EDD if I am receiving PUA or UI benefits? 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. Nevertheless, there are ways for borrowers to achieve full PPP loan forgiveness even if they do not fully restore their workforce. 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. 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. To apply for forgiveness of your PPP loan, you must complete the application and submit it to your lender. 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. Employees will likely need to pay income tax on the loan proceeds they receive, although the IRS has not yet issued any formal guidance on this. 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. The maximum EBL loan term is 7 years. Because PPP is an expansion of the already-existent 7(a) program, the financial institutions that offer 7(a) loans will be offering PPP loans as well. For a complete FAQ about the California COVID-19 relief grant program, please refer to this page: https://careliefgrant.com/50440-2/. What can I use the PPP loan proceeds for? On May 4, the SBA opened EIDL applications to agribusinesses, which suggests that afterwards they will likely reopen applications to everyone else who is eligible. This will determine loan amount! 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. Using line 7 gross income will usually lead to a higher loan calculation, so it will be preferred for most sole proprietors. 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. To verify full-time equivalent employees, you must submit 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. Chris and Gary, Check with your lender for specific details on how they will accept applications. 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. Have used or will use the full amount of their initial PPP loan. 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. No. 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). 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. Schedule of liabilities for a real estate agent : r/EIDL - reddit 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. This means sole proprietors without employees will all be able to get their PPP loans fully forgiven simply by filling out and submitting the one-page certification form to their lender. 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. 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. Good morning! %%EOF 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. Most brokers are likely to be eligible for loans which are being made available through the SBA. Your business structure must remain the same for the life of the loan. 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. For supplier costs: Copy of contracts, orders, or purchase orders in effect at any time before the Covered Period (except for perishable goods), copy o invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments. For annual revenues greater than $100,000 up to $1,000,000, the available grant amount is $15,000. These loans are offered in amounts of up to $350,000. Texas Property Tax Loans | Help with Delinquent Property Taxes Who Are Specialized Lenders in the SBA 7(a) Loan Program? Real Estate Agent Practice Complimentary Self-Defense Class for Real Estate Agents Mary Girsch-Bock is the expert on accounting software and payroll software for The Ascent. What is an SBA Express Bridge Loan, and who qualifies? The CARES Act II, signed on December 27, 2020, makes it clear that expenses paid with forgiven PPP loan proceeds can be deducted from the business federal income taxes, overturning a previous IRS rule on this subject. Dadyan and her co-conspirators used dozens of fake, stolen or synthetic identities 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. We can help you determine which program would be the right fit for your business, as well as determine the appropriate loan amount. I have followed up, but to no avail Hi Vince! 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). Your lender may have additional instructions for submitting the PPP loan forgiveness application or may require you to submit additional documentation. Both of these loan programs offer a number of advantages for real estate agents. Payment deferment until: (a) whenever the amount of loan forgiveness is remitted to the lender; or (b) 10 months after the applicable forgiveness covered period if a borrower does not apply for forgiveness during that 10month period.