Some PPP funding has been set aside for community banks, credit unions, and community development financial institutions. is not making any representations or warranties regarding the quality of their services. Real estate brokers: How to calculate your PPP loan amount (Like an emergency grant that is available within 3 days of applying even if you haven't been approved yet!). 6401 Congress Ave Ste 250Boca Raton FL 33487 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. Government guarantee of a loan means that the government assumes the debt obligation for the loan if the borrower defaults. ", For the Emergency Injury Disaster Loan (EIDL):This loan is very different from the Payroll Protection Plan (PPP) because there are very specific things you can cover with this loan. According to the Wall Street Journal, it usually takes SBA around one month to process a 7(a) loan. 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, Apply for a loan in minutes and get multiple quotes today The application date is May 2, 2020. 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. How will the decision be made as to who receives a grant? 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. This means that a borrower that chooses to file before the end of the Covered Period cannot contact the lender at a later date to mitigate any salary reductions after the loan forgiveness application has been filed. Eligible businesses will then be scored based on COVID-19 impact factors incorporated into the programs priority criteria, including the following: Geographic distribution based on COVID-19 health and safety restrictions following Californias Blueprint for a Safer Economy and county status and the new Regional Stay At Home Order; Industry sectors most impacted by the pandemic; and. 2030 0 obj <> endobj What is a second draw Paycheck Protection Program loan, and who qualifies? What Types of Homeowners Insurance Policies Are Available? Please be advised the lists above may be amended at any time without notice. In addition to revising the full forgiveness application, SBA also published a new EZ version of the forgiveness application. Many major lenders are currently only assisting borrowers who already have a business checking account with them. My Blog eidl for real estate agents 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. Compensation may impact the order of which offers appear on page, but our editorial opinions and ratings are not influenced by compensation. (office fees, advertising, cellphone, high speed internet, licensing fees, and real estate board fees?). However, there are some PPP lenders, such as community banks, that are willing to take new customers. Texas Property Tax Loans | Help with Delinquent Property Taxes Real Estate 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. 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. Loans are for a term of 30 years. 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. WebI was offered $150k on the Economic Injury Disaster Loan (EIDL) - should I take it? Some real estate firms offer selling California has created a small business COVID-19 relief grant program that provides micro grants ranging from $5,000 to $25,000 to eligible small businesses (including independent contractors and sole proprietors) impacted by COVID-19 and the related health and safety restrictions. 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. Eligible entities will be able to receive additional $5,000 grants through this program. Statutory Nonemployees. Im a sole proprietor whose gross income was more than $150,000 in 2019 or 2020. 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. Our accounting firm speculates it could be another 3-4 weeks. 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. Loan forgiveness means that you are not required to repay your loan. The 2019 or 2020 IRS Form 1040 Schedule C that was provided by a sole proprietor at the time of the PPP loan application must be used to determine the amount of gross income or net profit allocated to the borrower for the Covered Period. Are these grants still available? Eligibility requirements are fairly broad, so chances are good that your business will qualify if designated as one of the following: The 500-employee maximum applies to all the business types listed above. Regardless of whether you have filed a 2019 or 2020 tax return with the IRS, sole proprietors must provide the 2019 or 2020 Form 1040 Schedule C (depending on which year you used to calculate your maximum loan amount) with your PPP loan application to substantiate the applied-for PPP loan amount. All of the largest banks (such as JPMorgan Chase and Bank of America) are offering PPP loans. Best Homeowners Insurance for New Construction, How to Get Discounts on Homeowners Insurance. As of April 24, 2020, an additional $50 billion was allocated to EIDLs and an additional $10 billion was allocated for EIDL grants. SBA Covid-19 EIDL Loan Collateral and Personal Requirements SBA Covid-19 EIDL Loan Collateral and Personal Guarantee Requirements Address: 1016 E Osceola Parkway, Kissimmee, 34744, Florida, United States Phone: 407-502-2400 E-mail: info@freedomtaxfl.com Freedom Immigration Freedom Insurance & Financial Refer to www.sba.gov for full program details and coverage. What is an SBA Express Bridge Loan, and who qualifies? 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). real estate What should I look out for? 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. Cybersecurity There are thousands of banks that already participate in the SBAs lending programs, including numerous community banks. This may help you. eidl for real estate agents 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. Commercial Real Estate Loans,SBA7a Loans, 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). If you need to visit the SBA directly please click here: sba.gov. How the Stimulus Package Helps Real Estate Agents If you have the documentation available when applying for the loan, submitting it when applying will be preferable since it will simplify the forgiveness process once you reach that stage. Its available to small businesses, small agricultural cooperatives, and most private nonprofits in a disaster area that have suffered substantial economic damage. We recommend putting the PPP loan funds into a separate bank account to make it easier to track them. HUD 221d4 Loan, FAQs: Small Business Administration (SBA) Loans and Grants for Brokers, California Small Business COVID-19 Relief Grant Program. Yes, in some cases. will update this section if the state law changes. Who Are Specialized Lenders in the SBA 7(a) Loan Program? (Note: The SBA wants to collect this information for tracking purposes. The Economic Injury Disaster Loan or EIDL is designed for businesses with fewer than 500 employees. WebOne Experience. Understanding Homeowners Insurance Premiums, Guide to Homeowners Insurance Deductibles, Best Pet Insurance for Pre-existing Conditions, What to Look for in a Pet Insurance Company, Marcus by Goldman Sachs Personal Loans Review, The Best Way to Get a Loan With Zero Credit. The tests cover such subjects as forms of ownership, physical descriptions, valuation and regulation. How much money can I borrow with a PPP loan? EIDL Real estate brokers: Can you qualify for a PPP loan? And For a complete FAQ about the California COVID-19 relief grant program, please refer to this page: 2021Copyright CALIFORNIA ASSOCIATION OF REALTORS. 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. If the lender determines that the borrower is entitled to forgiveness of some or all of the loan amount, the lender must request payment from SBA at the time the lender issues its decision. However, lenders and borrowers can mutually agree to modify the maturity terms of a PPP loan. 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. Formula for sole proprietors without employees: Step 1: From your 2019 or 2020 IRS Form 1040 Schedule C, you may elect to use either your line 7 gross income amount or your line 31 net profit amount. will provide updates when we receive more information. (Note: The cap is based on 8 weeks worth or $15,385, whichever is less, for an 8-week Covered Period.). Eligible costs are only those costs incurred due to the COVID-19 pandemic and the health and safety restrictions such as business interruptions or business closures incurred as a result of the COVID-19 pandemic. |, California REALTORS expect coronavirus to, https://www.sba.gov/paycheckprotection/find, https://www.loanbuilder.com/ppp-loan-support, https://www.kabbage.com/paycheck-protection-program-loans/, https://getdivvy.com/covid-19/sba-ppp-loans/assistance/, https://sba.credibly.com/apply-online/?utm_medium__c=cpc&utm_source__c=google&utm_campaign__c=11-seg-brd-des&utm_term__c=11_bmm_credibly&utm_content__c=easy_responsive, https://www.biz2credit.com/disaster-support/cares-act-loans-coronavirus, https://unionbank.avoka-transact.com/workspace/servlet/SmartForm.html?formCode=ppp-loan, https://squareup.com/us/en/l/sba-ppp-loans, https://quickbooks.intuit.com/small-business/coronavirus/paycheck-protection-program/, https://www.icba.org/about/find-a-community-bank, https://www.creditunionsonline.com/california-credit-unions.html, https://www.cdfifund.gov/Documents/CDFI%20Cert%20List%2004-14-2020%20Final.xlsx, https://www.sbalenders.com/most-active-sba-banks-in-2019-mid-year-review/, https://smartasset.com/insights/ppp-loan-lenders. New to real estate and Carolina Ones James Island office, Arnold is the owner of a small business specializing in Live Edge Furniture and Home Dcor. Get referrals from family or friends who have used an agent or look for one who is active in the neighbourhood in which you are selling or buying. Will my PPP loan forgiveness be reduced if I lay off employees or reduce their salaries? The following are the eligible uses of grant funds: All employee expenses including payroll costs, health care benefits, paid sick, medical, or family leave, and insurance premiums; Working capital, overhead (including rent, utilities, mortgage principal and interest payments (excluding mortgage prepayments)), debt payments (principal and interest) incurred before March 1, 2020; Costs associated with re-opening business operations after being fully or partially closed due to state-mandated COVID-19 health and safety restrictions and business closures; Costs associated with complying with COVID-19 federal, state or local guidelines for reopening with required safety protocols, including but not limited to equipment, plexiglass barriers, outdoor dining, PPE supplies, testing, and employee training expenses; or. WebIs SIC code 6531 eligible for EIDL loan? Like any loan, there are disadvantages to obtaining an EIDL loan, so its up to you to determine whether the advantages outweigh the disadvantages. If a member doesnt report loan proceeds and they are eventually determined to be reportable income, EDD may seek to recover amounts paid plus penalties. I tried to apply for a PPP loan at my bank, but the bank refused to consider my application or rejected it. 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. Your lender may have additional instructions for submitting the PPP loan forgiveness application or may require you to submit additional documentation. 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. However, government officials have stated that the PPP process will be significantly expedited. This will determine loan amount! 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 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. The deadline for all borrowers to apply for an initial or second draw PPP loan is May 31, 2021. 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. Am I eligible for a PPP loan if I structure my business as an S Corp? The EIDL has a 30-year repayment plan, and there is no prepayment penalty if you decide to pay early. Both of these loan programs offer a number of advantages for real estate agents. 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. Businesses that have experienced substantial economic injury are eligible for an EIDL. However, keep in mind that CPAs are allowed to charge fees for advisory services, such as helping you decide which COVID-19 relief program is the best fit for your needs and circumstances. 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. Any EIDL Advance Amounts previously deducted from a borrowers forgiveness amount will be remitted to the lender, together with interest to the remittance date. Eligible operations expenditures include payments for any software, cloud computing, and other human resources and accounting needs. https://www.sba.gov/sites/default/files/2018-06/SOP%2050%2030%209-FINAL.PDF. %%EOF No, payroll costs do not include compensation to agents who are independent contractors. Where can I find a step-by-step guide for completing the application? 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. 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. recommends seeking a CPA to provide that assistance. Step 3: Multiply the average monthly amount from Step 2 by 2.5. You tax returns schedule C they will correlate with your profit and loss! What Is the EIDL Loan Program? 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. Owner Income Replacement is capped at 2.5 months worth or $20,833 per individual, whichever is less, for a 24-week Covered Period. You can borrow up to $25,000, which can be used for disaster-related purposes to support the survival and/or reopening of your business. HUD 232 Loan, 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. How will this affect forgiveness? 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. If youre an independent contractor, you may be Janover The proprietor expenses or owner income replacement portion of the PPP loan can be spent by the borrower on anything, at any time. Other SBA loan options include SBA express loans and SBA microloans. 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. In order to receive a second draw PPP loan, a borrower must: Employ not more than 300 employees. What happens if I previously had an EIDL advance deducted from my PPP loan forgiveness? 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. Dadyan and her co-conspirators used dozens of fake, stolen or synthetic identities Payroll costs do not include compensation to agents who are independent contractors. Tags: 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. For small businesses impacted by COVID-19, an EIDL offers some distinct advantages that you should take into account when deciding whether to pursue the loan. Option 1: Economic Injury Disaster Loans (EIDL) Businesses with 500 or fewer employees including sole proprietors, independent contractors and cooperatives 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. In addition to revising the. The full amount of the loan can be up to $500,000, with interest rates of 3.75% for for-profit businesses. endstream endobj 2031 0 obj <. No. has released to the press on the novel coronavirus: March 12, 2020: California REALTORS expect coronavirus to impact housing market. According to the SBA, applicants do not need to take any action at this time. SBA 7(a) Loans is a No. In response to the COVID-19 pandemic, the CARES Act established eligibility for two SBA loan programs: Section 7(a) Payroll Protection Program loans (PPP) and Agents may qualify for their own PPP loans. For businesses established after the fourth quarter of 2019, the SBA compares your second or third quarter of 2020 revenue to revenue from the first quarter of 2020. To apply for a PPP (Payroll Protection Plan), you must go through an approved SBA loan provider. As mentioned earlier, there are a lot of things that you cannot spend EIDL funds on, including employee bonuses, relocation costs, or loan repayments. In order to qualify for an SBA 504 loan, businesses must meet a strict set of eligibility requirements: In addition, the prospective borrower applicants must: Real estate agents can take advantage of the Small Business Administration's (SBA) loan programs to help fund their business. They may not be used to refinance long term debt. Best Mortgage Lenders for First-Time Homebuyers. Must be able to provide organizing documents including 2018 or 2019 tax returns or Form 990s, copy of official filing with the California Secretary of State, if applicable, or local municipality for the business such as one of the following: Articles of Incorporation, Certificate of Organization, Fictitious Name of Registration or Government-Issued Business License. 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. The United States Small Business Administration (SBA) delegates the authority to make PPP loans to numerous lenders throughout the country. 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. If you're using thewrong credit or debit card, it could be costing you serious money. For additional information on the COVID-19 EIDL loan program, visit Tafts COVID-19 Toolkit for articles provided by Tafts SBA Task Force. EIDL Loan For utility payments: Copy of invoices from February 2020 and those paid during the Covered Period and receipts, cancelled checks or account statements verifying those eligible payments. C.A.R. %PDF-1.6 % 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. 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. 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.
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