eidl for real estate agents

If this amount is zero or less, you are not eligible for a PPP loan. What should I do? If this amount is over $100,000, reduce it to $100,000, if this amount is less than zero, set this amount at zero. Since then "crickets", and no $$$ in my bank account. 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. 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. On June 17, 2020, the SBA posted a revised, borrower-friendly Paycheck Protection Program (PPP) loan forgiveness application implementing the PPP Flexibility Act. If your business has been hurt by COVID-19, it may be worth applying for an EIDL loan. The application date is May 2, 2020. Borrowers with loans of $150,000 or greater will need to submit additional documentation to obtain forgiveness. Borrowers have until December 31, 2020 (or, for PPP loans made after December 27, 2020, the last day of the Covered Period) to restore their workforce levels and wages to the pre-pandemic levels required for full forgiveness. Step 2: Calculate the average monthly gross income or net profit amount (divide the amount from Step 1 by 12). What are the risks if I do? Fill out the form below and a member of our team will get in touch with you. 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. 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. Refer to www.sba.gov for full program details and coverage. CMBS Loans, 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. What is an Economic Injury Disaster Loan, and who qualifies? As mentioned earlier, there are a lot of things that you cannot spend EIDL funds on, including employee bonuses, relocation costs, or loan repayments. If I received an EIDL advance, will the amount of the advance be deducted from my PPP loan forgiveness? Statutory Nonemployees. We are not affiliated with the Small Business Administration (SBA). Construction and Real Estate, Multifamily Minute Reader Reflections: When Do You Start the Refi Process? 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. Most real estate brokers and real estate firms are therefore likely to qualify. 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. Im a sole proprietor whose gross income was more than $150,000 in 2019 or 2020. You cannot apply for PPP loans on the SBA website. Additionally, no collateral is required to obtain a loan, and there is no personal guarantee requirement. A borrower will now be able to receive forgiveness if the borrower signs and submits to the lender, On June 17, 2020, the SBA posted a revised, borrower-friendly Paycheck Protection Program (PPP) loan forgiveness application implementing the PPP Flexibility Act. 6401 Congress Ave Ste 250Boca Raton FL 33487 This means that theoretically, businesses will not be able to take out dividends for over 30 years if they Are they looking for my tax deductions? Any EIDL Advance Amounts previously deducted from a borrowers forgiveness amount will be remitted to the lender, together with interest to the remittance date. CARES Act II provides that EIDL advances will no longer be deducted from PPP loan 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. Subscribe to Real Estate & Land Use Section news For borrowers with employees, payroll costs include cash compensation paid to employees, employer contributions to employee health insurance, employer contributions to employee retirement plans, and amounts paid by the borrower for employer state and local taxes assessed on employee compensation. Real estate agents can use a Small Business Administration (SBA) 7(a) loan to purchase real estate, buy or construct buildings, modernize their facilities, improve energy efficiency, and more. To apply for a PPP (Payroll Protection Plan), you must go through an approved SBA loan provider. (Note: The cap is based on 8 weeks worth or $15,385, whichever is less, for an 8-week Covered Period.). The proprietor expenses or owner income replacement portion of the PPP loan can be spent by the borrower on anything, at any time. 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. How do real estate firms calculate their maximum PPP loan amount? Once approved, money is usually transferred to your bank account, using the banking information that you provided in the application. After 14 Days it's just $67/month! WebI was offered $150k on the Economic Injury Disaster Loan (EIDL) - should I take it? 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. "Payroll costs" include net profit of independent contractors. If youre an independent contractor, you may be Some PPP funding has been set aside for community banks, credit unions, and community development financial institutions. A government guarantee reduces the risk to the borrower. 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. PPP loans are offered on highly favorable terms for borrowers: They are forgivable, they are guaranteed by the government, and payments are deferred. The CARES II Act created additional targeted EIDL advances for eligible entities located in low-income communities. Have used or will use the full amount of their initial PPP loan. Construction and real estate Is SIC code 6531 eligible for EIDL loan? 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. The commission is negotiable and is typically split between the sellers agent and buyers agent at 3% each. The result is the amount of PPP loan funding that youre eligible for. According to the SBA, applicants do not need to take any action at this time. UTC-05:00. EIDL loans are 30-year loans with an interest rate of 3.75%. 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. 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. I'm a Paperless Agent subscriber and appreciate ALL the information and support you provide us with - THANK YOU! What are the eligibility requirements for the program? We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Many or all of the products here are from our partners that compensate us. They may not be used to refinance long term debt. Formula for sole proprietors with employees. disclaims any and all liability related to the services provided by the companies on this list. How much money can I borrow with a PPP loan? If this amount is over $100,000, reduce it to $100,000. If your financial projections are looking grim, it might be worth considering applying for an EIDL loan before the December 21, 2020, deadline arrives. Thank You so much. According to the Wall Street Journal, it usually takes SBA around one month to process a 7(a) loan. What are the eligibility requirements for a targeted EIDL advance? 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. | Terms & Conditions, $20,833.33 initial loan and $20,833.33 second draw loan for independent contractors without employees. 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. Technology Supplier costs of perishable goods can be made before or during the life of the loan. It can be used for working capital, equipment, and owner-occupied commercial real estate. The best option is to contact the lender to arrange returning any portion of the loan in excess of what can be forgiven. You should consult with your tax advisor to see how PPP loan forgiveness may affect you and your business. Prior to May 4, the SBA had closed EIDL applications in order to work through the previous application backlog. 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. Applying for an EBL will be done through your lender. Borrowers with loans under $150,000 who fill out the short-form certification will not need to submit additional documentation to obtain forgiveness. Borrowers with employees may have costs that fall into this category. For businesses established after the third quarter of 2019, the SBA compares revenue from any 2020 quarter to the fourth quarter of 2019. SBA will loan borrowers up to $2 million for an initial PPP loan and up to $2 million for a second draw PPP loan. See our step-by-step guide on applying for an EIDL. All of the largest banks (such as JPMorgan Chase and Bank of America) are offering PPP loans. Economic Injury Disaster Loans (EIDLs) are targeted, low-interest loans to small businesses that have been severely impacted by the coronavirus. 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. Repayment plans are available up to 30 years as determined on a case-by-case basis. (Like an emergency grant that is available within 3 days of applying even if you haven't been approved yet!). Some real estate firms offer selling 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. Its a time for family, friends and creating lasting memories. or its members any referral fee or any other thing of value for being on this list. 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. However, emergency grants will now be targeted, meaning that the eligibility criteria are more restrictive. endstream endobj 2031 0 obj <. 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. As described below, Paycheck Protection Program (PPP) loans are provided on very favorable terms, and they may be the best option for brokers if used to cover payroll and overhead costs. Payroll costs do not include compensation to agents who are independent contractors. 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. 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. These companies are not in any way reviewed, supported or endorsed by C.A.R. 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. In this case, we would recommend looking into the EIDL program instead. 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). The maximum EBL loan term is 7 years. If you need assistance completing the PPP application, C.A.R. If the eligible entity received an EIDL advance earlier under the CARES Act, the targeted advance allows the entity to receive an amount equal to the difference of what the entity received under the CARES Act and $10,000. These lenders will be handling the PPP application process. 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. 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. Rupal Shah, Your email address will not be published. Will my PPP loan forgiveness be reduced if I lay off employees or reduce their salaries? 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). An attestation that the loan was used in compliance with the law. 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? However, for S-corporation owner-employees, owner income replacement is capped at 2.5 times their average monthly employee cash compensation and employer retirement contributions made on their behalf, but employer health insurance contributions made on their behalf cant be separately added because those are already included in cash compensation. Below are some resources and links that you can use to find a PPP lender. Economic loss is defined as the amount by which the gross receipts of the covered entity declined during an 8-week period between March 2, 2020 and December 31, 20201, relative to a comparable 8-week period immediately preceding March 2, 2020 or during 2019. Any unforgiven amounts will be considered loans with the following terms: A 1.00% interest rate (non-compounding and non-adjustable). Best Mortgage Lenders for First-Time Homebuyers. Nevertheless, there are ways for borrowers to achieve full PPP loan forgiveness even if they do not fully restore their workforce. The loan quote represents the amount that youre qualified to borrow, but you can change the amount when you electronically sign the application. The interest rate on an EIDL loan is 3.75% APR (fixed) with a 2.75% APR available for nonprofit organizations. How do I calculate my maximum PPP loan amount if I am a sole proprietor without employees? 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 you don't have one. A borrower may request that the SBA review the lenders decision regarding forgiveness of the loan in the event that the lender determines that the borrower is not eligible for forgiveness. Step 3: Multiply the average monthly gross income or net profit amount from Step 2 by 2.5. Press J to jump to the feed. 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. 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. Expanding a real estate brokerage: If you need to hire new employees or expand your marketing efforts, SBA 7(a) loans are a great choice. Unlike the PPP loan, EIDL loan forgiveness is not an option. 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 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. Yes but borrowers cannot take out an EIDL and a PPP loan for the same purposes. FIND A LENDER: Application period begins April 10th, Economic Injury Disaster Load Emergency Advance. by Mary Girsch-Bock | ($100,000 12 * 2.5). After that, PPP loans are 75% guaranteed for loans exceeding $150,000 and 85% guaranteed for loans equal to or less than $150,000. Chris and Gary, 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. 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. A small business must satisfy the following criteria to be eligible to receive a grant award: Must be a sole proprietor, independent contractor, or registered for-profit business entity (e.g., C-corporation, S-corporation, limited liability company, partnership) that has yearly gross revenue of $2.5 million or less (but at least $1,000 in yearly gross revenue) based on the most recently filed tax return. Effective March 25, 2020, SBA expanded the program to apply nationwide. Multifamily Minute Reader Reflections: How Will You Address Vacancy in 2023? 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.