Real estate agents Alternatively, you can submit lender account statements from February 2020 and the months of the Covered Period through one month after the end of the Covered Period verifying interest amounts and eligible payments. Using line 7 gross income will usually lead to a higher loan calculation, so it will be preferred for most sole proprietors. 2019 or 2020 employer health insurance contributions (health insurance component of Form 1040 Schedule C line 14), retirement contributions (Form 1040 Schedule C line 19), and state and local taxes assessed on employee compensation (primarily under state laws commonly referred to as the State Unemployment Tax Act or SUTA from state quarterly wage reporting forms). While taking out any loan requires serious consideration, an EIDL loan offers good repayment terms, a low interest rate, and an easy application process. recommends seeking a CPA to provide that assistance. Additionally, realtors can use the loan to help small businesses find the funding they need to purchase commercial real estate in the first place. CPA Tax Services. https://www.sba.gov/sites/default/files/2018-06/SOP%2050%2030%209-FINAL.PDF. For annual revenues greater than $100,000 up to $1,000,000, the available grant amount is $15,000. Real estate agents can use a Small Business Administration (SBA) 7 (a) loan to purchase real estate, buy or construct buildings, modernize their facilities, Rupal Shah, Your email address will not be published. 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). No. WebI was offered $150k on the Economic Injury Disaster Loan (EIDL) - should I take it? If I previously applied for a PPP loan and calculated my loan amount based on net profit, can I now reapply based on a gross income calculation? EIDL Best Mortgage Lenders for First-Time Homebuyers. The PPP also comes with usage restrictions. For rent or lease payments: Copy of current lease agreement and receipts of cancelled checks verifying eligible payments from the Covered Period. Are they looking for my tax deductions? If you need assistance completing the PPP application, C.A.R. Businesses that were not in operation on or before February 15, 2020 are not eligible for second draw PPP loans. My Blog eidl for real estate agents 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. No. Construction and Real Estate, However, it is possible the state law will be changed to conform with the new federal law. If your business has been hurt by COVID-19, it may be worth applying for an EIDL loan. Many EIDL Loans Will Cause Disaster For Unassuming Its a time for family, friends and creating lasting memories. We have investments real estate, clothing, watches and other goods. 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. I am a Paperless Agent member. Eligible property damage costs include costs related to property damage due to public disturbances that occurred during 2020 that are not covered by insurance. You cannot apply for PPP loans on the SBA website. For supplier costs: Copy of contracts, orders, or purchase orders in effect at any time before the Covered Period (except for perishable goods), copy o invoices, orders, or purchase orders paid during the Covered Period and receipts, cancelled checks, or account statements verifying those eligible payments. Homeowners, Renters, Business Owners: SBA Disaster Loans Key Any forgiven PPP loan proceeds do not need to be reported as gross income by the borrower for federal and state income taxes. Agents may qualify for their own PPP loans. 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. Any thoughts on what to do here? If you choose to apply for assistance, work with your lender to apply as soon as possible. If this amount is over $100,000, reduce it to $100,000, if this amount is less than zero, set this amount at zero. If the eligible entity has previously applied for EIDL assistance on or before December 27, 2020 but has not yet received an EIDL advance, the entity will be eligible to receive a grant of $10,000. %PDF-1.6 % Tags: WebLearn critical details of the benefits offered to real estate agents including: Unemployment Benefits, Economic Disaster Loans/Grants (EIDL) and the Payroll Protection Program C.A.R. Loans are automatically placed into deferment the first year of the loan, with repayment starting a year from when the initial loan was received. will update this section if the state law changes. What is an SBA Express Bridge Loan, and who qualifies? FIND A LENDER: Application period begins April 10th, Economic Injury Disaster Load Emergency Advance. If your financial projections are looking grim, it might be worth considering applying for an EIDL loan before the December 21, 2020, deadline arrives. 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. 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. 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. I'm a Paperless Agent subscriber and appreciate ALL the information and support you provide us with - THANK YOU! endstream endobj 2031 0 obj <. Additionally, if the propertys value decreases, you could find yourself underwater on your loan owing more than the property is worth. The EIDL loan application is streamlined for easy completion. for Real Estate Agents If I received an EIDL advance, will the amount of the advance be deducted from my PPP loan forgiveness? 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. No contract, cancel at any time. f`~5U This loan program can be used to build your real estate office, purchase commercial real estate, modernize facilities, improve energy efficiency, and more. But now, instead of eight weeks worth of average 2019 or 2020 weekly cash compensation (a max of $15,385 per individual), you can get loan forgiveness for up to 24 weeks worth of average weekly 2019 or 2020 cash compensation, making the new maximum forgiveness cap $46,154 for cash compensation per individual employee. All of the largest banks (such as JPMorgan Chase and Bank of America) are offering PPP loans. C.A.R.s Guidance for Employers regarding the COVID-19 situation provides more information on the FFRCA sick leave tax credits.). 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). Click here to read now. 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. Government guarantee of a loan means that the government assumes the debt obligation for the loan if the borrower defaults. Its also a time to reflect back on. 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. Where can I find more information about EBLs? | Terms & Conditions, $20,833.33 initial loan and $20,833.33 second draw loan for independent contractors without employees. Its available to small businesses, small agricultural cooperatives, and most private nonprofits in a disaster area that have suffered substantial economic damage. 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. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); The Commission Calculator is Available NowThe Commission Calculator was created to help you understand what milestones you need to reach to hit your commission goal. How will I be able to obtain forgiveness for my 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 The following options are available to brokers: Are California Relief Grants available for brokers from the state of California? What are the eligibility requirements for a targeted EIDL advance? Source. Step 3: Multiply the average monthly gross income or net profit amount from Step 2 by 2.5. 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. What happens if I previously had an EIDL advance deducted from my PPP loan forgiveness? How do I calculate my maximum PPP loan amount if I am a sole proprietor with employees? You tax returns schedule C they will correlate with your profit and loss! But you can qualify for those programs, even if you have no employees. Updated Aug. 5, 2022 - First published on May 18, 2022. 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. 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. 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. Agents may qualify for their own PPP loans. Real estate brokers: Can you qualify for a PPP loan? And 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. How can I apply for a targeted EIDL advance? If this amount is zero or less, you are not eligible for a PPP loan. Use of funds was expanded to Personal finance. Since the definition of payroll costs includes employee salaries, wages paid by an S Corporation will be considered payroll costs that can be covered by PPP loan proceeds. has not paid and will not pay the companies any compensation whatsoever for the level of service they have committed to providing. 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/. Consult with your accountant if you need assistance determining your gross receipts, and/or refer to SBAs FAQ document available here. ** C.A.R. What expenses can I spend the PPP loan proceeds on if I want the loan to be forgiven? Substantial economic injury means the business is unable to meet its obligations and pay its ordinary and necessary operating expenses. 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. If you need immediate financial relief, arranging an SBA Express Bridge Loan (EBL) (discussed below) with your lender is a good option. 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. Eligible rent costs include payments for rent obligations on real or personal property under a leasing agreement in force before February 15, 2020. 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 deadline applies for both first and second draw PPP loans. 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. Licensed Real Estate Agents - Real Estate Tax Tips 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. First, shop around! In our next piece, we also cover two big tax options real estate brokers can use to provide further relief. 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. However, government officials have stated that the PPP process will be significantly expedited. When will I know if my PPP loan is forgiven? Best Homeowners Insurance for New Construction, How to Get Discounts on Homeowners Insurance. If you don't have one. Will I need to pay income tax on the PPP loan proceeds if I use the proceeds for income replacement? However, if you get the $10,000 advance from the EIDL, you cannot use it for payroll costs and must instead use it for other business expense obligations. CMBS Loans, 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. 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. The deadline for all borrowers to apply for an initial or second draw PPP loan is May 31, 2021. Schedule of liabilities for a real estate agent . Applicants who submitted their application and submitted all documentation in an earlier application round should not reapply during subsequent rounds, since one complete application qualifies an applicant to be considered for all rounds. Supplier costs of perishable goods can be made before or during the life of the loan. I tried to apply for a PPP loan at my bank, but the bank refused to consider my application or rejected it. Head to the COVID Legal Documents page on car.org for access to: Step-by-Step Guide to PPP Loan Forgiveness for Borrowers With Employees, Step-by-Step Guide to PPP Loan Forgiveness for Borrowers Without Employees. How do I calculate my maximum PPP loan amount if I am a sole proprietor without employees? This will determine loan amount! 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. 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. Borrowers should calculate their maximum loan based on both options to determine which option will provide them with the largest maximum loan. Will this affect my loan forgiveness? (Note: The SBA wants to collect this information for tracking purposes. 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. Loans are for a term of 30 years. Read more: PPP loans: Proper documentation and accounting. There is nothing preventing a borrower from spending all PPP loan proceeds immediately upon receipt. 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).
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