Any other COVID-19 related expenses not already covered through grants, forgivable loans or other relief through federal, state, county or city programs. Because the cap limit is $100,000, if your net profit is over that, you have to reduce it to $100,000. OpportunityZones Help. Lenders are required to issue decisions on borrowers' forgiveness applications to the SBA within 60 days after receiving them. You tax returns schedule C they will correlate with your profit and loss! This means real estate industry PPP loan borrowers should be able to qualify for the EZ Version of the loan forgiveness application if they didnt reduce employee salaries by more than 25% during the Covered Period. In fact, this card is so good that our experts even use it personally. The maximum EBL loan term is 7 years. Using line 7 gross income will usually lead to a higher loan calculation, so it will be preferred for most sole proprietors. Get Quotes. SBA will first reach out to EIDL applicants that already received a partial EIDL advance (i.e. Eligible property damage costs include costs related to property damage due to public disturbances that occurred during 2020 that are not covered by insurance. Since real estate agency is a personal service business (which makes cost of goods sold inapplicable for most brokers), brokers should typically be able to use gross income or total income (for a firm) to determine their gross receipts for a quarter. Save my name, email, and website in this browser for the next time I comment. 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. 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. Refer to www.sba.gov for full program details and coverage. 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. For example, if youre qualified to borrow up to $50,000, you can change that amount to the amount you wish to borrow, up to $50,000. 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 list of partners, organized by location and by language services, can be found here. Will my PPP loan forgiveness be reduced if I lay off employees or reduce their salaries? When do I have to begin and end using PPP loan proceeds to qualify for forgiveness? Borrowers with loans under $150,000 who fill out the short-form certification will not need to submit additional documentation to obtain forgiveness. There remain many ambiguous provisions in the laws that continue to be clarified by rule-making at the federal and state agencies. Unlike the PPP loan, EIDL loan forgiveness is not an option. Pursuant to the COVID relief package that passed on December 27, 2020 (known as CARES II Act), borrowers that have previously received a PPP loan will now be allowed to take out a second PPP loan. No. What happens if any portion of my PPP loan is not forgiven? PPP loans are 100% guaranteed by the government through September 30, 2021. They may not be used to refinance long term debt. Subscribe to Real Estate & Land Use Section news Can I apply for both a PPP loan and an EIDL loan? Real estate agents can use SBA 7(a) loans for buying or maintaining a vehicle, refinancing business debt, and expanding a real estate brokerage. EIDL loans carry a low interest rate and a 30-year repayment term and can offer a lifeline to struggling small businesses. 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 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. What is an initial Paycheck Protection Program loan, and who qualifies? 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. Before you agree to a loan, be sure that you are aware of and understand EIDL loan terms and requirements adequately. The proprietor expenses or owner income replacement portion of the PPP loan can be spent by the borrower on anything, at any time. Mary Girsch-Bock is the expert on accounting software and payroll software for The Ascent. :), Hello! Real estate brokers: Can you qualify for a PPP loan? And Government guarantee of a loan means that the government assumes the debt obligation for the loan if the borrower defaults. Great to put this video instruction and helping out. FAQs: Small Business Administration (SBA) Loans and Grants for Brokers, California Small Business COVID-19 Relief Grant Program. 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. ", 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. Business finance However, lenders and borrowers can mutually agree to modify the maturity terms of a PPP loan. C.A.R. 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. Will this affect my loan forgiveness? For businesses established after the second quarter of 2019, the SBA compares revenue from any 2020 quarter to revenue from the third or fourth quarter of 2019. ** C.A.R. 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. 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. endstream endobj startxref 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. 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 Tue Mar 07 2023 at 10:00 am to 12:00 pm. If you only have a personal checking account, these lenders will still not accept your PPP application. Additionally, no collateral is required to obtain a loan, and there is no personal guarantee requirement. Are they looking for my tax deductions? Do I need to submit any additional supporting documentation with my loan forgiveness application? In addition to revising the full forgiveness application, SBA also published a new EZ version of the forgiveness application. For property damage costs: 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 costs were related to property damage and vandalism or looting due to public disturbances that occurred during 2020 and such costs were not covered by insurance or other compensation. The commission is negotiable and is typically split between the sellers agent and buyers agent at 3% each. How will I be able to obtain forgiveness for my PPP loan? Step 3: Multiply the average monthly gross income or net profit amount from Step 2 by 2.5. 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. You must also provide a 2020 invoice, bank statement, or book of record to establish you were in operation on or around February 15, 2020. Questions for the Real Estate and Construction 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. SBA 7(a) Loans is a But you can qualify for those programs, even if you have no employees. This website is owned by a private company that offers business advice, information and other services related to multifamily, commercial real estate, and business financing. Create an account to follow your favorite communities and start taking part in conversations. 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. After 14 Days it's just $67/month! Checking vs. Savings Account: Which Should You Pick? Any forgiven PPP loan proceeds do not need to be reported as gross income by the borrower for federal and state income taxes. Real estate agents But the funds that were set aside to cover the advance were quickly depleted, with the SBA discontinuing the advances in July of 2020. There are strict guidelines about what you can and cannot use EIDL loans for. EIDL Schedule of liabilities for a real estate agent . The Economic Injury Disaster Loan (EIDL) program is a loan program guaranteed by the SBA. 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. Read more: SBA PPP loan economic uncertainty certification. How Much Does Home Ownership Really Cost? SBA EIDL Loans are ELIGIBLE for Rental Properties 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. You cannot apply for PPP loans on the SBA website. The SBA instituted this rule to serve as an additional deterrent to fraud, waste, and abuse. Schedule. Will this affect my PPP application? 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. 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). Before you agree to a loan, be sure that you are aware of and understand EIDL loan terms and requirements adequately. 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. For more information about the Loan Necessity Questionnaire, please refer to question #53 of this document. I received an email for a loan processor asking for a couple of things from me. Dadyan and her co-conspirators used dozens of fake, stolen or synthetic identities I think only real estate investing is excluded. 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. What Types of Homeowners Insurance Policies Are Available? eidl for real estate agents The PPP also comes with usage restrictions. Real-estate brokers, are you looking for clarity around what help youre eligible for during the COVID-19 crisis? 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. Real estate brokers: How to calculate your PPP loan amount 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. Do I need to report my receipt of PPP loan proceeds to the EDD if I am receiving PUA or UI benefits? Its available to small businesses, small agricultural cooperatives, and most private nonprofits in a disaster area that have suffered substantial economic damage. 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. We have not reviewed all available products or offers. Multifamily Minute Reader Reflections: When Do You Start the Refi Process? Paypal https://www.loanbuilder.com/ppp-loan-support, Kabbage https://www.kabbage.com/paycheck-protection-program-loans/, Divvy https://getdivvy.com/covid-19/sba-ppp-loans/assistance/, Credibly - 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, Lend IO / Paychex https://www.lendio.com/, Biz2Credit.com / Paychex (may be requiring 2 or more employees) - https://www.biz2credit.com/disaster-support/cares-act-loans-coronavirus, Union Bank - https://unionbank.avoka-transact.com/workspace/servlet/SmartForm.html?formCode=ppp-loan, Square Capital - https://squareup.com/us/en/l/sba-ppp-loans, Intuit Quickbooks - https://quickbooks.intuit.com/small-business/coronavirus/paycheck-protection-program/, ReadyCapital - https://ppp.readycapital.com/. (NOTE: This paragraph does not apply if your loan was under $150,000 and are eligible to fill out the short-form certification.). Yes but borrowers cannot take out an EIDL and a PPP loan for the same purposes. A borrower will now be able to receive forgiveness if the borrower signs and submits to the lender a one-page certification form. Formula for sole proprietors with employees. A real estate agent has called out her landlord clients for jacking up the rent too much, with stunned tenants welcoming the 'brutal truth' of her comments. This powerful tool is de, If you're a real estate agent, chances are you've heard about the "Big Three" of real estate marketing: buying online leads, door knocking, and cold calling. 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. What assistance is available for brokers from the SBA? SBA has not yet announced when these remittances will occur. The grant amount will be based on the businesss annual revenue as documented in its most recent tax return. To apply for forgiveness of your PPP loan, you must complete the certification and submit it to your lender. SBAs EBL program guide is available here: https://www.sba.gov/document/support--express-bridge-loan-pilot-program-guide, CALIFORNIA SMALL BUSINESS COVID-19 RELIEF GRANT PROGRAM. Please refer to the Targeted EIDL Advances section below for more information. 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. WebCOVID EIDL Loans Information as of September 8, 2021 Contents Introduction Section 1: COVID EIDL Program Information Section 2: Submitting a New COVID EIDL Application For annual revenues greater than $1,000,000 up to $2,500,000, the available grant amount is $25,000. Press inquiries may be directed to Media Relations. Payroll costs do not include compensation to agents who are independent contractors. WebWe have been helping real estate agents and title companies with their foreign national clients for almost 20 years. 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. real estate agent's A California law passed on September 9 stated that expenses paid with forgiven PPP loan proceeds cannot be deducted for state income taxes. For the loan to be fully forgivable, any PPP loan proceeds that are not spent on payroll costs must be spent on certain non-payroll costs: namely, mortgage interest payments, rent, operations expenditures, property damage costs, supplier costs, worker protection expenditures, and utilities. 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. Borrowers with employees may have costs that fall into this category. 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. Must be able to provide acceptable form of government-issued photo ID. If you obtain an EIDL loan for more than $25,000, you will need to pledge business collateral to guarantee the loan. How long will it take for me to get an EIDL after I apply? And once youre done, you just submit the application and wait for a response, which includes a loan quote. 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. The program 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. For additional information on the COVID-19 EIDL loan program, visit Tafts COVID-19 Toolkit for articles provided by Tafts SBA Task Force. These are sample forms which illustrate the information you will need to apply for a PPP loan. We are a technology company that uses software and experience to bring lenders and borrowers together. The CARES Act II signed on December 27 creates a simplified loan forgiveness application process for loans under $150,000. 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. 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. endstream endobj 2031 0 obj <. To apply for an EIDL (Economic Injury Disaster Loan). Applying for the EIDL does not restrict your ability to also apply for the PPP if you are eligible for both. However, it is possible the state law will be changed to conform with the new federal law. 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. 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. 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. In order to receive a second draw PPP loan, a borrower must: Employ not more than 300 employees. real estate In comparison, microloans are loans designed for smaller, startup businesses, and are offered in amounts of up to $50,000. Complimentary Self-Defense Class for Real Estate Agents Will employees need to pay taxes on the proceeds that they receive? If your loan was $50,000 or less, then your forgiveness will not be reduced even if you lay off employees or reduce their salaries during the Covered Period. Which of the SBA loans should I apply for? 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. You do not need to take any action related to this decision prior to filling out the loan forgiveness application. The Act extends the deadline to apply for a PPP loan to May 31, 2021. 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. EIDL EIDL Loan If my PPP loan is forgiven, will I still be required to pay interest? 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. The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters. 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. All states require real estate agents to be licensed by the state to engage in the sale of real estate. Borrowers with employees may have costs that fall into this category. Rupal Shah, Your email address will not be published. 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. disclaims any and all liability related to the services provided by the companies on this list. As long as you did not receive a larger PPP loan than you are eligible for, this should not have any impact on loan forgiveness. If the first disbursement is not made within 90 days from receipt of an SBA loan number, the EBL loan will be canceled. 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. Apply for a loan in minutes and get multiple quotes today. Proceeds must be used for purposes approved by the SBA, which include: Improvements to property such as utilities, parking lots, street enhancements, and landscaping, Constructing new facilities or modernizing/renovating existing facilities, Buying machinery and equipment for long-term use. Yes but borrowers cannot take out an EIDL and a PPP loan for the same purposes. 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. 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. To apply for a PPP (Payroll Protection Plan), you must go through an approved SBA loan provider. Considerations for Approvals of PPP and EIDL SBA Loans by Are these grants still available? The two most common loan programs are the SBA 7(a) loan and the SBA 504 loan. It was very helpful.I have applied for both loan. However, government officials have stated that the PPP process will be significantly expedited. For annual revenue of $1,000 to $100,000, the available grant amount is $5000. Weve all come to expect an overly complicated process when it comes to anything associated with government programs. Applications will be reviewed to determine whether the applicant meets the eligibility requirements. For more information about the Loan Necessity Questionnaire, please refer to question #53 of. Chris and Gary, Payroll costs (including paid sick leave), employee salaries, rent expenses, mortgage expenses, utility expenses, PPE expenses, operations expenses, property damage costs, supplier costs, insurance premiums and other debt obligations. 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. An eligible entity must be: (i) located in a low-income community; (ii) have suffered an economic loss of greater than 30 percent; and (iii) employ not more than 300 people (sole proprietors and independent contractors are also eligible). In 2020, the CARES Act II reopened the PPP program for those who hadnt taken a PPP loan in the first round, as well as providing for the second draw PPP loans discussed below. The deadline for all borrowers to apply for an initial or second draw PPP loan is May 31, 2021. Loan forgiveness means that you are not required to repay your loan. 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). 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. For annual revenues greater than $100,000 up to $1,000,000, the available grant amount is $15,000. The SBA will reach out to those who qualify to explain how to receive a targeted EIDL advance.