While taking out any loan requires serious consideration, an EIDL loan offers good repayment terms, a low interest rate, and an easy application process. Press inquiries may be directed to Media Relations. Construction and real estate How long will it take for me to get an EBL after I apply? is not making any representations or warranties regarding the quality of their services. Licensed real estate agents are statutory nonemployees and are treated as self-employed for all Federal tax purposes, including C.A.R. Will employees need to pay taxes on the proceeds that they receive? Read more: SBA PPP loan economic uncertainty certification. 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). What are the PPP loan terms for any amounts that are not forgiven? What forms do sole proprietors need to provide to the lender to apply for a PPP loan? Both of these loan programs offer a number of advantages for real estate agents. Press question mark to learn the rest of the keyboard shortcuts. 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. What is an SBA Express Bridge Loan, and who qualifies? Your business must be an eligible business as determined by the SBA including (but not limited to): Have been in business for a minimum of two years. If you need to visit the SBA directly please click here: sba.gov. However, there are some PPP lenders, such as community banks, that are willing to take new customers. The proprietor expenses or owner income replacement portion of the PPP loan can be spent by the borrower on anything, at any time. As of April 24, 2020, an additional $50 billion was allocated to EIDLs and an additional $10 billion was allocated for EIDL grants. Since then "crickets", and no $$$ in my bank account. 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. EIDL A government guarantee reduces the risk to the borrower. Please be advised that you are not required to seek services from any of the companies suggested. Please check this FAQ frequently for updates. The companies will not pay C.A.R. OpportunityZones Help. If I'm on Disability, Can I Still Get a Loan? Reddit and its partners use cookies and similar technologies to provide you with a better experience. Can a sole proprietor include a prorated portion of their home mortgage interest payments, home rent payments, and/or home utility bills as eligible non-payroll expenses if they have a home office and deduct these expenses on their IRS Form 1040 Schedule C? However, keep in mind that EIDLs (with the exception of targeted advances) are conventional loans and not forgivable. Collateral can include assets such as inventory and equipment as well as intangible assets such as trademarks and copyrights. However, there are some PPP lenders, such as community banks, that are willing to take new customers. (Note: The cap is based on 8 weeks worth or $15,385, whichever is less, for an 8-week Covered Period.). company. 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). Step 2: Calculate the average monthly gross income or net profit amount (divide the amount from Step 1 by 12). 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. If your financial projections are looking grim, it might be worth considering applying for an EIDL loan before the December 21, 2020, deadline arrives. The result is the amount of PPP loan funding that youre eligible for. 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. The only portion of the loan that was able to be forgiven was the advance, which is no longer available. If you're on a Galaxy Fold, consider unfolding your phone or viewing it in full screen to best optimize your experience. How much money can I borrow with an EBL, and what are the terms of the loan? I have followed up, but to no avail Hi Vince! 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. In our next piece, we also cover two big tax options real estate brokers can use to provide further relief. You will choose the length of the Covered Period for your loan when you fill out the PPP loan forgiveness certification or application. But what if we told you that the, The Commission Calculator is Available NowWe love the holidays at the Paperless Agent. Small Business Loans Guide: Before You Start. According to the Wall Street Journal, it usually takes SBA around one month to process a 7(a) loan. What are the eligibility requirements for the program? We are a technology company that uses software and experience to bring lenders and borrowers together. 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. 5 EIDL Loan Terms and Requirements You Should Know - The 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. The deadline for all borrowers to apply for an initial or second draw PPP loan is May 31, 2021. 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. The two most common loan programs are the SBA 7(a) loan and the SBA 504 loan. FAQs: Small Business Administration (SBA) Loans and Grants for Brokers, California Small Business COVID-19 Relief Grant Program. But before signing on the dotted line, you should be aware of some of the disadvantages of this loan. Cash compensation including salary, wages and tips is capped at $100,000 of annualized cash compensation per employee. Will this affect my PPP application? What happens if any portion of my PPP loan is not forgiven? 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. Agents may qualify for their own PPP loans. WebOne Experience. Most real estate brokers and real estate firms are therefore likely to qualify. 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. Personal finance. If your business has been hurt by COVID-19, it may be worth applying for an EIDL loan. 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. Real estate agents can use a Small Business Administration (SBA) 7 (a) loan to purchase real estate, buy or construct buildings, modernize their facilities, Dallas Real Estate | North Texas | Ebby Halliday 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. For the formula to calculate the maximum PPP loan you are eligible for, see the Application Process section below. Applying for the EIDL does not restrict your ability to also apply for the PPP if you are eligible for both. Because the cap limit is $100,000, if your net profit is over that, you have to reduce it to $100,000. PPP applications already reopened the week of January 11 for community development financial institutions. EIDL loans are 30-year loans with an interest rate of 3.75%. endstream endobj startxref Real Estate 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. Applicants will be contacted directly by SBA via email in the coming weeks with instructions to determine eligibility and submit documentation. If you choose to apply for assistance, work with your lender to apply as soon as possible. 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). Must not use proceeds for any of the following: Funding for other debts (refinancing, consolidating, or repaying). No. 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. 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. Independent contractors and sole proprietors are also eligible. 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. Check with your bank to determine if it is currently offering EBLs and to see if you qualify. The SBA prohibits you from obtaining an EIDL loan if your business engages in any of the following activities: Other things that may disqualify you from obtaining an EIDL loan is if any principal owner with a 50% or greater interest in your business is more than 60 days late on child support obligations. Members should expect that reporting PPP loan proceeds will reduce benefits for those weeks. real estate SBA has not yet announced when these remittances will occur. How can I apply for a targeted EIDL advance? Save my name, email, and website in this browser for the next time I comment. Applications for the program must be submitted through a Community Development Financial Institution (CDFI) that has partnered with the state of California to distribute the funds. Are they looking for my tax deductions? This second loan is called a second draw PPP loan.. However, government officials have stated that the PPP process will be significantly expedited. Yes but borrowers cannot take out an EIDL and a PPP loan for the same purposes. The loan quote represents the amount that youre qualified to borrow, but you can change the amount when you electronically sign the application. Click here to read now. 2021Copyright CALIFORNIA ASSOCIATION OF REALTORS. For more information on SBA 7(a) loans, please visit https://www.sba7a.loans/sba-7a-loans-small-business-blog/how-do-commercial-real-estate-loans-work. 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. To be eligible for a supplemental targeted advance, an entity must meet all of the criteria above, plus: (1) the entity must employ not more than 10 people; and (2) the entity must have suffered an economic loss greater than 50 percent. All states require real estate agents to be licensed by the state to engage in the sale of real estate. 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. The one-page certification form requires the borrower to provide: The number of employees retained by use of the loan. Considerations for Approvals of PPP and EIDL SBA Loans by