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ZOOM SEMINAR FROM 1.19.21
ZOOM SEMINAR FROM 1.25.21
Contact your bank to find out if they are participating in the PPP funding.
Find out what their application process is.
Gather the documentation necessary to apply for the loan.
Calculate your average monthly payroll costs.
What's the latest on Economic Injury Disaster Loan (EIDL) Grants and Loans?
SBA Extends Deferment Period for all COVID-19 EIDL and Other Disaster Loans until 2022
WASHINGTON –The U.S. Small Business Administration announced extended deferment periods for all disaster loans, including the COVID-19 Economic Injury Disaster Loan (EIDL) program, until 2022.
All SBA disaster loans made in calendar year 2020, including COVID-19 EIDL, will have a first payment due date extended from 12-months to 24-months from the date of the note.
All SBA disaster loans made in calendar year 2021, including COVID-19 EIDL, will have a first payment due date extended from 12-months to 18-months from the date of the note.
Existing SBA disaster loans approved prior to 2020 in regular servicing status as of March 1, 2020, received an automatic deferment of principal and interest payments through December 31, 2020. This initial deferment period was subsequently extended through March 31, 2021. An additional 12-month deferment of principal and interest payments will be automatically granted to these borrowers. Borrowers will resume their regular payment schedule with the payment immediately preceding March 31, 2022, unless the borrower voluntarily continues to make payments while on deferment. It is important to note that the interest will continue to accrue on the outstanding balance of the loan throughout the duration of the deferment.
EIDL grants/loan application process appears to be delayed until mid-February.
The SBA is not accepting new applicants at this time.
If you already received an EIDL grant that is less than the $10K maximum, SBA will reach out to you via email. It appears as though you may receive the difference between the original amount you received and the full $10K amount.
If you submitted a grant application and did not receive anything because money ran out, your application will be considered next “in line”. The SBA will reach out to you via email.
Can you apply for a second loan due to COVID?
It is hard to say with 100% certainty, but based on the article below, it appears as though the answer is “no”.
Are located in a low-income community. The definition of a “low-income community” is defined in section 45D(e) of the Internal Revenue Code. Note that the applicant must be located in a low-income community in order to qualify. Additional details on how SBA will identify low-income communities will be available soon on our Coronavirus Relief Options page; AND
Can demonstrate more than 30% reduction in revenue during an 8-week period beginning 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% reduction.
Areas in Morristown that are considered low income communities. The one area of Speedwell Ave & Spring St, from approximately Bishop Nazery Way to Lake Pocahontas. The east side of Speedwell Ave, Route 202, going along Martin Luther King Avenue area. One side of Speedwell Avenue is designated as low income and the other side is not. The CVS /Laundry Land area of Speedwell Avenue is designated as a low income corridor.
The portal for EIDL may be opening again in mid-February.
I am self-employed and have no employees, how do I calculate my maximum First Draw PPP Loan amount?
PPP Loan – For a sole proprietor
Here is how to calculate your PPP loan amount as a sole proprietor.
Question: I am self-employed and have no employees, how do I calculate my maximum First Draw PPP Loan amount? (Note that PPP loan forgiveness amounts will depend, in part, on the total amount spent by the borrower during the covered period following disbursement of the PPP loan.)
Answer: The following methodology should be used to calculate the maximum amount that can be borrowed if you are self-employed and have no employees, and your principal place of residence is in the United States, including if you are an independent contractor or operate a sole proprietorship (but not if you are a partner in a partnership):
Step 1: Find your 2019 IRS Form 1040 Schedule C line 31 net profit amount.3 If this amount is over $100,000, reduce it to $100,000. If this amount is zero or less, you are not eligible for a PPP loan.
Step 2: Calculate the average monthly net profit amount (divide the amount from Step 1 by 12).
Step 3: Multiply the average monthly net profit amount from Step 2 by 2.5.
Can/Should I use 2019 or 2020 Payroll Costs when calculating my PPP loan?
You can use either your 2019 or 2020 payroll costs to calculate your loan.
How does the Employee Retention Tax Credit (ERTC) affect the PPP?
Employee Retention Tax Credit (ERTC)
Please check with your financial expert to see how to best use the ERTC.
Note from Rich Largman: My understanding is that you should hold off on forgiveness of the first loan until you understand how forgiveness will impact the ERTC.
Which application do I use?
If you did not receive a PPP loan yet, use the first draw application form below:
Please note: Your lender may have a specific application or online portal available to apply.
I did not receive the PPP on the first Round, do I still have to demonstrate the 25% decrease for 2020 over 2019?
If this is the first time you are applying (PPP1 or first Round), you do not have to demonstrate the 25% loss. You’ll see that on the application
If I use the PPP as a loan, how long do I have to repay that loan?
You have up to 5 years to repay the loan, with 1% interest.
If I did not get Round 1, can I use the employee tax credit for 2020 and then get the loan (PPP1) for 2021?
Question for your financial expert. We may be able to go out to someone for advice if you don’t have an expert to ask contact us at firstname.lastname@example.org
Can I apply if I am self-employed?
Yes, you can apply if you are a self-employed business owner or Sole Proprietor. You will need a Schedule C, a 1099 Miscellaneous form, and a 2020 bank statement proving you were in business in 2/15/2020. If self-employed, look on Schedule C, line 31. That’s the number you use to divide by 12 to get your monthly payroll costs, then multiply by 2.5. Maximum total amount is $100,000.
For quarter to quarter comparison, year to year for revenue comparisons, must your payroll reflect payroll from that same quarter?
Yes, it has to be. You can’t change the conditions. It has to be compared from quarter to quarter, from 2019 & 2020.
Then do 2.5 times your payroll during the same period? What is that slice in time? We are a seasonal business & our payroll changes from quarter to quarter.
We may have to research. It may be answered as we go through this presentation. If it doesn’t, we will hunt it down or get answers from an expert. Contact us at email@example.com with your questions.
We can pick any quarter to compare, 2Q2019 versus 2Q2020, correct?
My store has been closed for 8 months in 2020 and still closed. Some employees are still being paid and some just left. I’m not sure what to do.
If you did not get PPP1, you can use 2019 numbers to apply for loan to factor in your payroll costs.
Contact your bank to help you, as well as your accountant to help you with some of your questions.
Where can I find the application for PPP1 (First Draw)?