SBA COVID-19 FUNDING OPTIONS

 

On this page you will find information about the SBA COVID-19 Funding Options, which are:

• PPP (Paycheck Protection Program), which is no longer available
• PPP Forgiveness Information
• EIDL (Economic Injury Disastaer Loan)
• Targeted EIDL Advance & Supplemental Targeted Advance.

 

 

PPP LOAN APPICATION IS NOW CLOSED AND APPLICATIONS CAN NO LONER BE SUBMITTED!!!

PPP loans were being extended through May 31, 2021, with certain PPP requirements being revised, and permitting second draw PPP loans. The Interim Final Rule allows individuals who file an IRS Form 1040, Schedule C to calculate their maximum loan amount using gross income, removes the eligibility restriction that prevents businesses with owners who have non-financial fraud felony convictions in the last year from obtaining PPP loans, and removes the eligibility restriction that prevents businesses with owners who are delinquent or in default on their Federal student loans from obtaining PPP loans.

Please note that Small Businesses with fewer than 20 Employees had a two-week window of priority, that window was opened on February 24, 2021 and closed on March 9, 2021, at that time all businesses (including small businesses to large corporations) applications began processing, which can cause funds to possibly be depleted. If you are a small business get your applications submitted ASAP.

If you are looking to apply for a PPP Loan, you will first need to determine if you qualify for the 2nd round of PPP (the 1st round was from March 2020 to August 2020). The qualifications are different and depends on whether you are applying for your first or second PPP Loan.

Who May Qualify

The following entities affected by COVID-19 may be eligible:

• Sole proprietors, independent contractors, and self-employed persons
• Any small business concern that meets SBA’s size standards (either the industry size standard or the alternative size standard)
• Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans organization, or tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:
  • 500 employees, or
  • That meets the SBA industry size standard if more than 500
• Any business with a NAICS code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location

 

2021 PPP Loan Requirements:

First Draw PPP Loans

If the following statements apply to your business, you are elgible to appy for your first draw PPP Loan:

• Your business existed and was operational BEFORE February 15, 2020.
• Your business is currently open and operational.
• You have no more than 500 employees and/or if your business has multiple locations, you do not have more than 500 employees per location.

Second Draw PPP Loans

If the following statements apply to your business, you are elgible to appy for your second draw PPP Loan:

• You have exhausted (used) all of your first PPP Loan.
• Your business existed and was operational BEFORE February 15, 2020
• Your business is currently open and operational.
• You have no more than 300 employees and/or if your business has multiple locations, you do not have more than 300 employees per location.
• You can show a 25% or more loss in gross revenue from 2019 to 2020 (loss can be shown yearly or quarterly, to use the quarterly method the loss must be in the same comparable quarters, i.e. compare 1st quarter of 2019 to 1st quarter of 2020, if 2020 1st quarter is 25% or more less than 2019 1st quarter, then you have met the gross revenue reduction requirement). 

YOU DO NOT QUALIFY IF ANY OF THE FOLLOWING STATEMENTS ARE TRUE:

• Your business did not exist and/or was not operable prior to February 15, 2020.
• If your business is currently not operating (no longer in business).
• You only employ household employees, such as babysitters, housekeepers, etc... (household employees doesn't qualify the payor as a business)
• If any owner with 20% or more business ownership has a prior criminal record that involved any type of fraud.
• If you are any business owned and/or controlled by you and/or others, is deliquent and/or has defaulted on a loan from the SBA and/or any other Federal agency within the last seven years (this excludes federal student loans).
• You or your business and or any owners of said business is bankrupt or is currently in bankruptcy proceedings.
• You are an officer or key employee of the lender with whom you are applying with, or a close relative of one, if so, you may only apply for the PPP Loan Funds with an unaffiliated lender).
• Your business is a hedge fund or private equity firm.
• Your business is in an industry that is normally not eligible for SBA 7(a) loans, such as MLM entities. 

PPP Loan Additional Requirements by entity type:

Independent Contractors:

If an Independent Contractor is applying for a PPP Loan, the IC will need a tax-ready (meaning ready to be filed with the IRS) 2019 and/or 2020 Schedule C Form form your personal 1040 tax return. It does not have to be filed, however, it must be complete and accurate and you must intend to file said tax form(s) with the IRS. You will also need your form 1099-MISC from 2019 and/or your form 1099-NEC from 2020. (You must have reported a net profit on your Schedule C in 2019 and/or 2020.

Sole Proprietorships (SP) and Single Member LLC's (SMLLC):

If a Sole Proprietor and/or SMLLC is applying for a PPP Loan, the SP and/or SMLLC will a tax ready 2019 and/or 2020 Schedule C from your personal tax return. It does not have to be filed, however, it must be complete and accurate and you must intend to file said tax form(s) with the IRS. If you had employees on payroll and withheld taxes from their earnings, you must have payroll tax forms 940 and 941/944 for 2019 and/or 2020.

Parnterships (LLC's with more than one member/partner and file form 1065):

Individual partners should not submit separate applications, only one application should be submitted on behalf of the entire Partnership. If you had employees on payroll and withheld taxes from their earnings, you must have payroll tax forms 940 and 941/944 for 2019 and/or 2020. PPP Loans also provide coverage to partners that can't take a salary (as partners are not allowed to be on payroll), however, you can include their self-employment earnings as reported on their Schedule K-1 capped at $100,000.00 and multiplied by 0.925.

S - Corps:

Only S-Corps who have payroll are eligible for the PPP. If the only payments you recieved, as the owner, were from owner draws and/or distributions and did not pay payroll taxes on said earnings, the PPP Loan is not suitable for you nor can it be used to cover your earnings/payouts, however, if you had other employees on payroll then you can apply based on the payroll paid to employees.  If you had employees on payroll and withheld taxes from their earnings, you must have payroll tax forms 940 and 941/944 for 2019 and/or 2020.

C Corps:

Only C-Corps who have payroll are eligible for the PPP. If the only payments you recieved, as the owner, were from owner draws and/or distributions and did not pay payroll taxes on said earnings, the PPP Loan is not suitable for you nor can it cover your earnings/payouts, however, if you had other employees on payroll then you can apply based on the payroll paid to employees.  If you had employees on payroll and withheld taxes from their earnings, you must have payroll tax forms 940 and 941/944 for 2019 and/or 2020.

Non-Profits:

Will have to had ran payroll in 2019 and/or 2020 to qualify for the PPP Loan. Faith-based orgainizations should also check the SBA guide on eligibilty.

 

Applying for the PPP Loan (APPLICATIONS SUBMISSIONS ARE CLOSED)

On January 6, 2021, the SBA released four applications, broken up in two groups: two apps are for First Draw PPP Loans and the other two apps are for Second Draw PPP Loans.

PPP Loan applications are being accepted for them both and is set to expire on May 31, 2021.

You can check with your lender on submitting an application through them or you can contact us and have us submit your application on your behalf to our Partner's bank network (we are partnered with a company that is affiliated with mutliple banks, our partner will match you with the bank that is most likely to approve your application). 

If you would like to utilize our services, please complete the PPP Loan application that apply to you.

 

• 1st Draw PPP Loan Application (this form is not for Schedule C filer's who want to use their Gross Revenue instead of net income)
• 1st Draw PPP Loan Application (for Schedule C filer's that want to use their Gross Revenue instead of net income)
• 2nd Draw PPP Loan Application (this form is not for Schedule C filer's who want to use their Gross Revenue instead of net income)
• 2nd Draw PPP Loan Application (for Schedule C filer's that want to use their Gross Revenue instead of net income) 

 

(PLEASE NOTE THAT WE ARE NOT A LENDER AND DO NOT HAVE A DIRECT LINE OF COMMUNICATION WITH THE SBA, NOR ARE WE AFFILIATED AND/OR PARTNERED WITH THE SBA. WE DO NOT HAVE ANYTHING TO DO WITH THE APPROVAL AND/OR THE DENIAL OF ANY LOANS)

 

Upon completing the application that applies to you, please click on one of the options below to schedule your consultation.

 

• Need assistance applying for the PPP, or you can't find a Lender?  CLICK HERE (No Longer Available per SBA and/or Congress)
• Need assistance applying for the PPP Loan Forgiveness? CLICK HERE

 

COVID-19 EIDL

 

The EIDL (Economic Injury Disaster Loan) is a LOAN to provide fiancial relief to small businesses and non-profit orgainizations that were in business on or before January 31, 2020 and that are experiencing fianancial hardship and have temporary losses due to the COVID-19 pandemic. COVID-19 EIDL applications must be submitted on and/or before December 31, 2021.

The amount of an EIDL a Business, Self-Employed Individual, Independent Contractor or Non-Profit organization can borrow is determined by a formula setforth by the SBA, and the formula is as follows: 

 

For profit Businesses, Sole Proprietors / Self Employed Individuals or Independent Contractors:

Note: Agricultural businesses that use Schedule F will use total expenses rather than costs of goods sold.

 

If your Business, Sole Proprietorship / Sefl Employed Venture, or Independent Contractor Service were in operations prior to 2019:

• The Formula you would use is: 

(2019 gross receipts minus 2019 costs of goods sold) multiplied by 2. If you owned investment real estate, up to 2 years of lost rent based on actual 2019 rent received minus actual 2020 rent received multiplied by 2 (You will be asked to provide documentation to prove your lost rent) or $500,000, whichever is less.

If your business, Sole Proprietorship / Sefl Employed Venture, Independent Contractor Service started in 2019:

• Formula you would use is:

(Average monthly 2019 gross receipts multiplied by 12) minus (Average monthly 2019 Cost of Goods Sold multiplied by 12) multiplied by 2 If you owned investment real estate, up to 24 months of lost rent based on actual 2019 rent received minus actual 2020 rent received multiplied by 2 (You may be asked to provide documentation to prove your lost rent) or $500,000, whichever is less.

If your business, Sole Proprietorship / Sefl Employed Venture, Independent Contractor Service started between January 1, 2020 and January 31, 2020:

• The Formula you would use is:

(Average monthly 2020 gross receipts multiplied by 12) minus (Average monthly 2020 cost of goods sold multiplied by 12) multiplied by 2 or $500,000, whichever is less.

For Non-Profit Organizations:

 

If your Non-Profit Organizations that were in operations prior to 2019:

• The Formula you would use is:

(2019 total revenue minus 2019 total expenses) multiplied by 2 If you owned investment real estate, up to 24 months of lost rent based on actual 2019 rent received minus actual 2020 rent received multiplied by 2 (You may be asked to provide documentation to prove your lost rent) or $500,000, whichever is less.

If your Non-Profit Organization started in 2019:

• The Formula you would use is:

(Average monthly 2019 expenses multiplied by 12) multiplied by 2 If you owned investment real estate, up to 24 months of lost rent based on actual 2019 rent received minus actual 2020 rent received multiplied by 2 (You may be asked to provide documentation to prove your lost rent) or $500,000, whichever is less.

If your Non-Profit Organization started between January 1, 2020 and January 31, 2020:

• The Formula you would use is:

(Average monthly 2020 expenses multiplied by 12) multiplied by 2 If you owned investment real estate, up to 24 months of lost rent based on actual 2019 rent received minus 5 | Page actual 2020 rent received multiplied by 2 (You may be asked to provide documentation to prove your lost rent) or $500,000, whichever is less.

 

Use the table below as a guide, informing you where to find the numbers on your respective tax form(s) to use in calculating how much of a loan you can borrow.

 

Entity Type	IRS Form	Gross Receipts	Cost of Goods Sold	Expenses
Self-Employeed	1040 Schedule C	Line 1	Line 4	NA
Self-Employed	1040 Schedule F	Line 9	NA	Line 33
S-Corporation	1120-S	Line 1a	Line 2	NA
C-Corporation	1120	Line 1a	Line 2	NA
Cooperatives	11201-C	Line 1a	Line 2	NA
Partnerships	1065	Line 1a	Line 2	NA
Privately owned nonprofit org	990	Line 12	NA	Line 18
Privately owned nonprofit org	990-EZ	Line 9	NA	Line 17

 

EIDL Loan Terms:

• EIDL is a COVID Loan that must be repaid.  It is not forgivable like the PPP Loan.

• Interest Rates and Term
  • Businesses interest rates are 3.75% fixed for 30 years.
  • Private nonprofit organizations interest rates are 2.75% fixed for 30 years.
  • Payments are deferred for the first 18 months, during which time interest will accure, and payments of principal and interest are made over the remaining years, (example: you obtain/receive the lone on September 1, 2021, your loan will be defered; meaning no payments are required, until March 1, 2023, and for the remaining 342 months you will be repaying the loan.)

• Collateral:
  • No collateral is requried for loans in the amount of $0.00 -$25,000.00.
  • Security agreement will be required on business assests for loans in the amount of $25,001.00 - $500,000.00. (liens will not be placed on real estate unless it's used accomodate the applicant if the applicant has no other business assests and need a loan amount that requrie collateral).

• Personal Guaranty:
  • No personal guranty is required for loans of $0.00 - $20,000.00.
  • Loans that are $200,001.00 - $500,000.00  require a full persoanl guaranty from ALL individuals or entities owning 20% of more of the applicant business. If no single owner owns 20% or more in the business, then at least one individual or entity must provide a full guaranty.

• Underwriting:
  • The ability to repay will be determined by the owner's credit score, which can not be less than 570.
  • The underwriting requirement for loan repayment can be satisfied by an acceptable credit score of the owner's. 

 

What can the EIDL loan proceeds be used for?

Covid EIDL loan proceeds can be used for any of the following:

• Regular payments for operating expenses.
• Incurred business debt, including but not limited to business credit card(s).
• Payroll expenses, including paying yourself...... ****
• Rent/Mortgage for your business.
• Utilities for your business.
• Other ordinary and/or neccessary business expenses.

COVID EIDL loan proceeds CAN NOT be used to expand your business nor open up a new business... examples of expanding, you started expanding your business in January 2020 and on January 15, 2021 you acquired a storefront but you were not using the newly acquired storefront prior to January 31, 2020 as you were going to renovate it prior to actually using it... The loan proceeds CAN NOT be used to complete said renovations as those renovations fall under business expansion.

****It has been asked: "What can a borrower use the funds that they pay themselves as payroll for?"  The funds that you pay yourself via payroll can be used for whatever you choose to use your paycheck for.  There aren't any specifications that state, that what you pay out in payroll to yourself and/or others, that their paycheck can only be used for. What a person do with their paycheck is their business and is not regulated by any entities nor anyone.

 

To view the SBA's entire list of Frequently Asked Questions, which was updated on August 4, 2021, please CLICK HERE.

 

Need assistance applying for the EIDL Loan? CLICK HERE TO SCHEDULE YOUR CONSULTATION TODAY!

 

 

 

COVID-19

TARGETED EIDL ADVANCE & SUPPLEMENTAL TARGETED ADVANCE

Per the SBA Program Overview: "Applicants for the COVID-19 Economic Injury Disaster Loan (EIDL) may be eligible to receive up to $15,000 in funding from SBA that does not need to be repaid. These "advances" are similar to a grant, but without the typical requirements that come with a U.S. government grant."

"To receive an advance, you must first apply for a COVID-19 Economic Injury Disaster Loan. You do not need to accept the loan or be approved for the loan to receive an advance. Once you apply for the loan, SBA will invite you via email to apply for one of the advance programs if your business is located in a low-income area."

 

Targeted EIDL Advance Requirements: (Targeted EIDL Advances are up to $10,000.00)

• Must be located in a low-income community. "To help applicants determine if they are in a low-income community as defined in section 45D(e) of the Internal Revenue Code, a mapping tool (sbaeidl.policymap.com/app) is available. The business address must be in a low-income community to qualify so SBA encourages potential applicants to check the map to see if they meet the low-income community eligibility requirement before they apply."
• Must be able to show more than a 30% or more decrease in revenue / income during an 8 week period starting on March 2, 2020, or later. If an applicant meets the low-income community criteria, they will be asked to provide gross monthly revenue (all forms of combined monthly earnings received, such as profits or salaries) to confirm the 30% or more reduction.
• Can not have more than 300 employees, including business owner(s).

Supplemental Targeted Advance: (Supplemental Targeted Advances are up to $5,000.00)

• Must be located in a low-income community. "To help applicants determine if they are in a low-income community as defined in section 45D(e) of the Internal Revenue Code, a mapping tool (sbaeidl.policymap.com/app) is available. The business address must be in a low-income community to qualify so SBA encourages potential applicants to check the map to see if they meet the low-income community eligibility requirement before they apply."
• Must be able to show more than a 50% decrease in revenue / income during an 8 week period starting on March 2, 2020, or later, compared to the same period of the previous year. If an applicant meets the low-income community criteria, they will be asked to provide gross monthly revenue (all forms of combined monthly earnings received, such as profits or salaries) to confirm the 50% or more reduction.
• Can not have more than 10 employees, including business owner(s).

 

To view the SBA's entire list of Frequently Asked Questions pertaining to the Targeted EIDL Advance & the Supplemental Targeted Advance, which was updated on April 27, 2021, please CLICK HERE.

 

Need assistance applying for the EIDL Targeted Advance & the Supplemental Targeted Advance?

CLICK HERE TO SCHEDULE YOUR CONSULTATION TODAY!