If someone took the drive-through option literally at your restaurant, you cannot use an EIDL loan to repair the damage. hbbd``b`~$ *3z B $b .H "AG Eligible entities will be able to receive additional $5,000 grants through this program. Is SIC code 6531 eligible for EIDL loan? Image source: Author. 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. (office fees, advertising, cellphone, high speed internet, licensing fees, and real estate board fees?). 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. Step 2: Calculate the average monthly gross income or net profit amount (divide the amount from Step 1 by 12). 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. 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. Any forgiven PPP loan proceeds do not need to be reported as gross income by the borrower for federal and state income taxes. Most borrowers with employees will also be able to use the EZ version of the forgiveness application, as long as they did not reduce salaries or hourly wages by more than 25 percent for any individual employee during the Covered Period compared to the period between January 1, 2020 and March 31, 2020; AND as long as one of the following is true: (a) They did not reduce the number of employees or the average paid hours of employees between January 1, 2020 and the end of the Covered Period; OR (b) 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 compliance with requirements established or guidance issued between March 1, 2020 and December 31, 2020 related to COVID-19 (or, for a PPP loan made after December 27, 2020, requirements established or guidance issued before the last day of the Covered Period). 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. 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. There are thousands of banks that already participate in the SBAs lending programs, including numerous community banks. 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. Real estate agents can use SBA 7(a) loans for buying or maintaining a vehicle, refinancing business debt, and expanding a real estate brokerage. Lastly, and very importantly, the SBA instructs that before applying for a PPP loan, borrowers should consider whether their potential access to other sources of liquidity ultimately makes a PPP loan unnecessary to support their ongoing operations. Read more: PPP eligibility and how small businesses can use the funds. WebThe standard, fair commission for a real estate agent is 6% of the home's sale price. The loan quote represents the amount that youre qualified to borrow, but you can change the amount when you electronically sign the application. Information is available at careliefgrant.com in addition to the information in this FAQ. What forms do sole proprietors need to provide to the lender to apply for a PPP loan? 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 What is an Economic Injury Disaster Loan, and who qualifies? The contractor must have been engaging in business when the declared disaster commenced and must meet all other 7(a) loan eligibility requirements. 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 We have investments real estate, clothing, watches and other goods. Getting a small business loan should be easy. 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). What happens if I previously had an EIDL advance deducted from my PPP loan forgiveness? Agents may qualify for their own PPP loans. Supplier costs of perishable goods can be made before or during the life of the loan. There are 2 programs, that we can take advantage of as real estate agents, that allow us to continue to operate despite what's going on: Economic Injury Disaster 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. If your financial projections are looking grim, it might be worth considering applying for an EIDL loan before the December 21, 2020, deadline arrives. For businesses established after the third quarter of 2019, the SBA compares revenue from any 2020 quarter to the fourth quarter of 2019. For more information about the Loan Necessity Questionnaire, please refer to question #53 of this document. 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. Effective March 25, 2020, SBA expanded the program to apply nationwide. Press inquiries may be directed to Media Relations. Some real estate firms offer selling Many major lenders are currently only assisting borrowers who already have a business checking account with them. This means that theoretically, businesses will not be able to take out dividends for over 30 years if they Will employees need to pay taxes on the proceeds that they receive? They are currently available to small businesses with fewer than 500 employees, including sole proprietors, independent contractors and other self-employed individuals. Because an EBL loan is a bridge loan, first disbursement of the EBL loan must occur within 45 days of the lenders receipt of an SBA loan number. To apply for forgiveness of your PPP loan, you must complete the application and submit it to your lender. C.A.R. Will I need to pay income tax on the PPP loan proceeds if I use the proceeds for income replacement? The following options are available to brokers: Are California Relief Grants available for brokers from the state of California? Get Quotes. 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. From March 25 to March 31, there will be another application round where businesses that have not yet applied for a grant will be permitted to apply. CMBS Loans, company. After 14 Days it's just $67/month! Must be an active business operating since at least June 1, 2019. WebReal Estate Agent is a small business received COVID-19 Targeted EIDL Advance and Supplemental Targeted Advance from U.S. Small Business Administration (SBA), Office of Entrepreneurial Development. I received an email for a loan processor asking for a couple of things from me. If youre an independent contractor, you may be If you have already applied for or received an EIDL loan related to COVID-19 before April 3, 2020 and used the loan proceeds to cover payroll costs, you will be able to refinance the EIDL into a PPP loan for purposes of loan forgiveness. 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. (Note: The SBA wants to collect this information for tracking purposes. 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. Businesses that were not in operation on or before February 15, 2020 are not eligible for second draw PPP loans. Your net profit for 2019 was $230,000. The risks associated with taking out a small business loan for real estate agents include the possibility of monthly payments increasing significantly at the end of the interest-only period when you are required to start paying both principal and interest. Other SBA loan options include SBA express loans and SBA microloans. 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). 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. 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 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. 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. 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. Will this affect my PPP application? Because of the current application backlog, application approvals are likely to be significantly delayed. 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. 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. 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. If you are considering applying for a PPP loan with one of these smaller lenders, here are some resources to locate a lender in your area. To apply for a PPP (Payroll Protection Plan), you must go through an approved SBA loan provider. 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. What are the eligibility requirements for the program? 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. 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. 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. We are not affiliated with the Small Business Administration (SBA). endstream endobj startxref Click below for a free, no obligation quote and to learn more about your loan options. We recommend putting the PPP loan funds into a separate bank account to make it easier to track them. To apply for forgiveness of your PPP loan, you must complete the certification and submit it to your lender. WebAs of September 8, 2021, new COVID-19 EIDL policy changes took effect as follows: Maximum loan cap increased from $500,000 to $2 million. Applications will be reviewed to determine whether the applicant meets the eligibility requirements. 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. https://www.sba.gov/sites/default/files/2018-06/SOP%2050%2030%209-FINAL.PDF. HUD 232 Loan, 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. 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. Tags: 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. Real estate agents can use a Small Business Administration (SBA) 7 (a) loan to purchase real estate, buy or construct buildings, modernize their facilities, Calculating how much youre entitled to as an independent contractor has a formula to it. 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. See Question 3A. The application date is May 2, 2020. Use of funds was expanded to (Like an emergency grant that is available within 3 days of applying even if you haven't been approved yet!). Independent contractors who have been adversely impacted by the COVID-19 emergency are eligible. Licensed real estate agents are statutory nonemployees and are treated as self-employed for all Federal tax purposes, including The actual loan size borrowers receive will be determined by a formula based on average total monthly payroll costs over a one-year period. If the full principal of the PPP loan is forgiven, the borrower is not responsible for the interest accrued. For annual revenue of $1,000 to $100,000, the available grant amount is $5000. 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). Most real estate brokers and real estate firms are therefore likely to qualify. by Mary Girsch-Bock | How will the decision be made as to who receives a grant? SBA has not yet announced when these remittances will occur. Step 3: Multiply the average monthly amount from Step 2 by 2.5. 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. Construction and Real Estate, Its a time for family, friends and creating lasting memories. Tax forms (or equivalent third-party payroll service provider reports for the periods that overlap with the Covered Period. Many brokers structure their businesses as S Corporations and pay themselves salaries from the corporations funds. CPA Tax Services. However, emergency grants will now be targeted, meaning that the eligibility criteria are more restrictive. 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. 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. The SBA refers to this as owner income replacement. The borrower can spend the owner income replacement portion of the PPP loan on anything the borrower chooses. Borrowers should calculate their maximum loan based on both options to determine which option will provide them with the largest maximum loan. 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. 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. 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. Kind of a weird one. ($100,000 12 * 2.5). Read through - EIDL eligibility criteria starts at page 64. C.A.R.s Guidance for Employers regarding the COVID-19 situation provides more information on the FFRCA sick leave tax credits.). What should I look out for? 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. How Much Does Home Ownership Really Cost? 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. We will provide additional information and guidance if it becomes available. Webhow long can a dog live with parathyroid disease. What is an SBA Express Bridge Loan, and who qualifies? Multifamily Loans,Multifamily Today, Businesses that have experienced substantial economic injury are eligible for an EIDL. Unlike the PPP loan, EIDL loan forgiveness is not an option. 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. 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. Yes but borrowers cannot take out an EIDL and a PPP loan for the same purposes. Learn more about this loan, including qualifications and how to apply. 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. Payroll costs do not include compensation to agents who are independent contractors. I received an email for a loan processor asking for a couple of things from me. The lender is responsible for notifying the borrower of the forgiveness amount after the SBA makes its decision. WebLearn critical details of the benefits offered to real estate agents including: Unemployment Benefits, Economic Disaster Loans/Grants (EIDL) and the Payroll Protection Program If you are a sole proprietor or independent contractor without employees, entering 0 on the form will not affect your forgiveness.). A default loan term of 2 years for loans dispersed prior to the enactment of the PPP Flexibility Act, and 5 years for loans dispersed after the enactment of the PPP Flexibility Act. We have not reviewed all available products or offers. If you are applying for a second draw PPP loan, the best option may be to work with the lender that provided you with the initial PPP loan. 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. 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). C.A.R. 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. She previously worked as an accountant. Members should expect that reporting PPP loan proceeds will reduce benefits for those weeks. Must currently be operating or have a clear plan to re-open once the State of California permits re-opening of the business. Additionally, many financial technology (FinTech) companies have started processing PPP loan applications. What Types of Homeowners Insurance Policies Are Available? With all of the information floating around about stimulus packages and loans, you're probably wondering what this bail out means to you, as a real estate agent, and how you can get access to YOUR stimulus money We want to make sure you know exactly how to get the support you need and how to get it the right way, so we asked the experts to explain it to us, and boy did they deliver. Because the cap limit is $100,000, if your net profit is over that, you have to reduce it to $100,000. 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. 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. But the funds that were set aside to cover the advance were quickly depleted, with the SBA discontinuing the advances in July of 2020. Many major lenders are currently only assisting borrowers who already have a business checking account with them. If you're on a Galaxy Fold, consider unfolding your phone or viewing it in full screen to best optimize your experience. 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. We are a technology company that uses software and experience to bring lenders and borrowers together. Real-estate brokers, are you looking for clarity around what help youre eligible for during the COVID-19 crisis? 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. 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. Applying for the EIDL does not restrict your ability to also apply for the PPP if you are eligible for both. Applying for an EBL will be done through your lender. Loan forgiveness means that you are not required to repay your loan. How much money can I receive for an EIDL loan? Borrowers can exclude from loan forgiveness calculations employees who turned down good faith offers to be rehired at the same hours and wages as before the pandemic. If you need to visit the SBA directly please click here: sba.gov. And because the SBA requires you to save the receipts of any purchases made with EIDL loan monies, you must track these purchases properly. Were also here to help you navigate the uncertainty of the COVID-19 pandemic and its impact on your finances and business. Chris and Gary, We will continue to update this FAQ as any rules or other guidance are provided. 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. According to the Department of the Treasury, the lender must make the first disbursement of a PPP loan no later than ten calendar days from the date of loan approval. Reddit and its partners use cookies and similar technologies to provide you with a better experience. If you only have a personal checking account, these lenders will still not accept your PPP application. 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. 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. 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. Mary Girsch-Bock is the expert on accounting software and payroll software for The Ascent. All independent contractors and sole proprietors without employees will be able to use this short certification form, since their loans were capped at $20,833. Below are some resources and links that you can use to find a PPP lender. Borrowers with loans under $150,000 who fill out the short-form certification will not need to submit additional documentation to obtain forgiveness. For annual revenues greater than $100,000 up to $1,000,000, the available grant amount is $15,000. The SBA requires that at least 75% of the PPP loan be spent on payroll, while the remaining 25% can be spent on expenses such as utilities, rent, mortgage interest and other debt obligations. 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. Apartment Loans,HUD Loans, Government guarantee of a loan means that the government assumes the debt obligation for the loan if the borrower defaults. Most brokers will qualify for EIDLs. Therefore, please keep in mind that it is not certain you will receive a grant even if you apply and meet all eligibility requirements. Standard SBA Loans are not available for passive income (except Hotels and Self 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 However, there are some PPP lenders, such as community banks, that are willing to take new customers. No, payroll costs do not include compensation to agents who are independent contractors. Prior to May 4, the SBA had closed EIDL applications in order to work through the previous application backlog. These loans are offered in amounts of up to $350,000. 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.

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