[C0VlD-19] Forgiveable SBA Loans For Small Biz and Freelancers

[PizzaOnTheRoof]

So my LLC can qualify for this money as long as I pay it to employees!? (Of which there is one -- me!)

Dang. Off to the SBA site I go.

Yep. That’s why everyone should at least apply.

Worst case you just don’t qualify.

Hell, Joe Schmoe EBay flipper might even qualify.

No sweat to the government, it’s first come first serve.

 

[Vigilante]

Wow you guys are lucky...

Here in Canada we just get a $40000 interest free loan if we paid between $50k-$1mill in payroll in 2019.

I don't have employees and I haven't put myself on payroll yet.

No cash has flowed yet from the stimulus package or these SBA loans. Time will tell.

 

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[garyfritz]

The online application is really quick and lightweight. The CPA dude implied there was lots more to fill out. I assume they'll contact us for any additional info? CPA strongly implied you had to get it right the first time or you'd lose out while they were backfilling your app info.

 

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[lowtek]

I just applied, very fast process. We'll see what happens. Gotta get some of that government cheddar. Claw back some of what they've taken over the years in taxes.

 

[MoneyDoc]

My crystal ball says there's going to be less and less appetite to pass more stimulus. The stuff that was easy to agree to has passed. The Bills coming down the pipeline are likely to be a lot more partisan because there is substantially less urgency.

If your cash flow is crippled, then apply for the loan. I'm not here to say who does and does not deserve it. I'm explaining my thought process since on FB (and even some of this forum) I see a lot of "GIVE ME ALL THE FREE MONEY." I don't think the help will be unlimited, which means there is a finite amount that will be available in the next couple months.

Maybe I'm wrong and the cash will keep flowing, but in the short term the cash is finite, and there will absolutely be people who will be denied these loans due to lack of funds.

Here in Canada some provinces have issued warnings that if you're found to have abused the options such as mortgage deferrals or rent deferrals, there will be strict penalties. I am actually VERY glad they did introduce this as I personally have seen people that have not had 1 person lose their job call the bank and tell them they have family members laid off and can't pay the mortgage. A straight up lie. Little do they know, it's very easy for the government to find out if you lost your job or if you're not being paid anymore.

 

[Vigilante]

Sorry I should have been more clear.

Let's say that you personally have $250k in the bank. But your business LLC has only $5k in the bank and you have $25k in bills, rent, etc.. coming due. And it is a single member LLC.

your personal money is not the business money. The business is an entity.

 

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[Captain Swuey]

Well, there is this guy...

I've chosen to take this with a grain of salt.

 

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[Vigilante]

Do you want to good news or the bad news?

The good news is I just received a form letter from the SBA via email indicating they are moving forward with the EIDL program.

The bad news is they have changed the terms so that instead of getting the $10,000 advance it is $1000 per employee up to a maximum of 10 employees or $10,000 maximum on the advance.

It’s something, but likely not going to have an impact for its intended purpose unless you play through and get the full blown loan which can be amortized over 30 years.

 

[Scot]

Do you want to good news or the bad news?

The good news is I just received a form letter from the SBA via email indicating they are moving forward with the EIDL program.

The bad news is they have changed the terms so that instead of getting the $10,000 advance it is $1000 per employee up to a maximum of 10 employees or $10,000 maximum on the advance.

It’s something, but likely not going to have an impact for its intended purpose unless you play through and get the full blown loan which can be amortized over 30 years.

Yep, just got that email too.

Email:
Dear Applicant,

On March 29, 2020, following the passage of the CARES Act, the SBA provided small business owners and non-profits impacted by C0VlD-19 with the opportunity to obtain up to a $10,000 Advance on their Economic Injury Disaster Loan (EIDL). The Advance is available as part of the full EIDL application and will be transferred into the account you provide shortly after your application is submitted. To ensure that the greatest number of applicants can receive assistance during this challenging time, the amount of your Advance will be determined by the number of your pre-disaster (i.e., as of January 31, 2020) employees. The Advance will provide $1,000 per employee up to a maximum of $10,000.

 

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[MoneyDoc]

How? They shut down private business and then gave you a limited line of credit with terms and 5% interest for the privelege of being able to use money you didnt need before this happened.

The canadian government is a complete joke and has been for the past several years with Trudeau leading it.

I get alot of the sentiments in this thread. But its mind blowing to me how everyone is just taking this like this is how it's supposed to be.

The government came in and shut down capitalism, mortgaged everyone + their kids futures, and is telling you - it needs to be paid back with interest for the privilege of saving your business.. If my business was more drastically affected id be absolutely livid.

And to @Vigilante and @CareCPA point... Im about as much of a capitalist as it gets. But this isnt capitalism anymore. Theyre bailing out any company with a pulse, the government is taking stock in public companies, and people are being literally paid by the government to live...

Literally this is everyone receiving their checks+stimulus this week and paying it back out the next.
https://media.giphy.com/media/g8A6kKFew4w0w/giphy.mp4

Capitalism was sold out a long time ago.

And the argument of what else are they going to do in a situation like this? is simple. Don't let it get to a situation like this, we've had virus' consistently for the past decade and no one did anything to prepare. Blows my mind that these morons in office are so quick to pull the fed lever when they could have allocated some of our tax dollars to preparing for a virus.

Meh... I'm 100% Capitalist as well.

I stay out of politics.

But I do agree with you. I'm not a fan of my government. However, compared to other countries, I think it was faster, easier, for a business to get a loan.

 

[biophase]

My $10,000 from EIDL is pending in my business account. My credit was run yesterday and the money deposited today. I haven't had one email or phone call from the SBA since I applied weeks ago, so I thought I was not close to getting any funds. Then Bam! There it is.

I applied March 28, got an email two days ago and money yesterday. No communication at all.

 

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[Lex DeVille]

Update:

I did not get $10,000. I assume this is due to the recent updates to the stimulus program.

I did get $1,000 deposited into my account this morning.

I have not received any additional information by email or otherwise so far.

 

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[Rwill]

I applied for mine here in Canada. $40,000 credit line through your bank secured by the government. After one year the credit line freezes with what you have owning, then converts to a loan. You then have another year to pay off 75% of it and the government will forgive the remaining 25%. Interest free for up to 5 years.

Basically borrow $40,000 and after a year or two pay back only $30,000. Why not take them up on this?

 

[Scot]

It will very likely be reupped.

But seriously, if anyone has upper level contacts at a bank, send me a message. This is a huge black swan opportunity, and if Paypal can do it, then others positioned correctly can too...

How quickly can we open an online bank?

 

[Ronak]

How quickly can we open an online bank?

Not quick enough, have to partner with an existing lender that can get access to Fed lending capacity, has a federal charter so they can market in all 50 states (even single branch banks can have this), and is willing to move fast to take advantage of multi-billion dollar lending opportunity with essentially no risk. The tech exists to make it happen.

 

[biophase]

I did sign my closing docs for the PPP, but never heard anything afterwards.

My PPP came in. It was actually funded and deposited into my account but I didn't notice it until today.

 

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[Gary]

How do you check for this?

Both Discover and Capital One send me alerts if anything impacts my credit score.

 

[Gary]

My PPP came in. It was actually funded and deposited into my account but I didn't notice it until today.

Congratulations! I signed my PPP loan docs this past Saturday night, with funding supposedly to be in my account on April 24.

I realize we are now a few days after the money ran out, so I'm not confident that it will happen. However, I got my application in early, and it was a long process of submitting additional documents. I'm hoping my PPP money was allocated through my lender and the additional paperwork was just the final steps.

 

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[becks22]

Got my EDIL Grant for 3K (one K for each employee) and my PPP funding. Feeling great today!

 

[Gary]

I’m in the same boat. Signed loan docs today. They seemed confident that getting the number last week meant that my money was secure, but I’ll feel better once it’s actually in my bank account.

It'll happen for you. My PPP dropped today into my business checking. As I mentioned previously, I was told April 24. However, I got a nice surprise this morning when checking my accounts.

 

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[becks22]

Credit pull 2 days ago for EDIL grant and funded today.

Anyone hear anything about getting the full amount of the EDIL loan based on half of 2019 gross margin?

My credit check was 2 or 3 days ago as well. I thought the EDIL was based on the number of full time employees you had in 2019. Mine is 3 and I received 3K so it makes sense.

 

[GuitarManDan]

Applied the first day the SBA.gov site came out with the simplified online form (believe it was at the end of March), but still haven't heard anything back yet/received any money yet. I know I was a few days late so maybe the funds ran out before they could get to me.

Seems like it'll only be $1,000 for me anyway (just myself as the 1 employee for my LLC)... should I take any proactive actions or hopefully once Congress approves the next rounds of funding I could expect to get the payment then? I've seen posts about speaking with various banks, but I didn't apply through any specific bank but just the general SBA site.

 

[CoachR]

Short form on the portal on 3/31. I don't *remember* providing bank info ...


Yeah me too. I was hoping for the $10k because I already have $5k in lost profits directly caused by COVID travel restrictions, and I also have upcoming lost revenue because of it. But if it's just $1000 per employee (me) ...

Supposedly they signed a new one today. More money going out and will run out just as quick as the first I imagine.

 

[Lex DeVille]

Have you heard back yet? If so, how long did it take?

Ya was like 2 days to process.

 

[Ronak]

Still on the fence...

Bit the bullet and took the money. I am sure it will come in handy. I was surprised how fast the money was transferred after I signed the note, literally the next business day.

 

[SteveO]

Hi all ... been out of touch for a while but I need to figure out this SBA loan. I applied for a $20k loan (since the pandemic directly cost me well over $20k just last summer), even though I wasn't strapped for cash. I was hoping to pick up on the "forgiven grant/loan" benefit.

Well they started sending me statements, and it was clear the interest on the $20k was piling up. Given that I wasn't using the money, it didn't make sense to keep adding to the interest, so I paid off $18k of the loan. Still hoping they would forgive the remainder. Well all I've gotten since then is statements for how much I still owe, and how much interest is still accruing on the $2k. Not a word about forgiving the remaining amount.

Is the grant still for real? Is there any point in holding this open, or should I just pay it off?

We got 140k loan. Sent in all the information and 136k was forgiven.

 

[CareCPA]

I requested more than $1k per employee because I suffered way more losses than that. Plus I applied before they reduced it to $1k per employee.

They don't seem to be treating it as a grant, because it started accruing interest on Day 1, and every month they send a statement reminding me I will have to pay it back starting on 6/4/21. And the amount they say I owe is the full loan amount + interest. No sign of a forgiven portion.

I should probably just pay back the full $2000 + interest I still owe. Really feels like a bait-and-switch though.


No one helped me. I followed the instructions on the website. Banker was not involved. I filled out the form on the website, and about 2 months later the money magically appeared.

There were two main funding programs as part of the CARES Act: PPP and EIDL.

PPP was a forgivable loan to cover payroll and mortgage/rent/utilities (business). This was calculated at 2.5x monthly payroll from the previous year.
Funds from the PPP that were used for payroll were forgiven.
In the "second" stimulus at the end of December, they expanded the approved expenses and opened a second-round PPP.
All of the above points are subject to a host of thresholds and qualifications. They've also changed the rules several times since they came out.

The EIDL was/is a loan. However, there was a grant portion as well, which was $1k per employee up to $10k. The grant portion was forgivable even if you ultimately didn't take the loan. The remainder of the loan was not forgivable.

 

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[becks22]

@WillHurtDontCare

 

[PizzaOnTheRoof]

Found a video on how to apply for the loan.

And yes, it IS the disaster SBA loan program.

 

[Vigilante]

I just applied for the Disaster Loan (7b) directly on the SBA website. Took less than 5 minutes.

We'll see what I'm approved for, as it doesn't actually let you apply for a specific dollar amount.

Did you have to submit tax returns etc.

 

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