Did you submit your application yet? It only takes a few minutes on the SBA website.

yep

Marcus Aurelius said:

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yep

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I submitted today as well for our consulting business. No clue how long the process takes but I imagine they are overwhelmed at the moment.

Hmmm. Good info. Am aware the payrole forgiveness loan is administered thru a local bank. Our acct firm helping. Our mgr pretty sharp. Sure she is aware of other stuff. Complicated. Hard enough to stay on top of this damn virus and deal with financial disaster. Our hospital offering zero assistance.

Thank you so much. It sounds like I applied for the wrong one. EIDL but intended to apply for the other loan.

Gumby said:

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Thank you so much. It sounds like I applied for the wrong one. EIDL but intended to apply for the other loan.

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I hope you asked for the $10K Emergency grant. It doesn't have to repaid if they send it to you! But it is part of the forgiveness in the PPPL if you get that one...

Yes I did. It also looks like the PPP has not started accepting applications yet. Is there a new system being developed to administer the PPP applications?

Do banks have the guidelines/instructions from the SBA yet to initiate the loan process? My bank and several friends are all saying "call back later this week".

Gumby said:

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Yes I did. It also looks like the PPP has not started accepting applications yet. Is there a new system being developed to administer the PPP applications?

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No, the guidance isn't out yet. But the application will be with your bank so there won't be a "common" app like with the EIDL

I would definitely be shopping for an SBA 7(a) lender that you trust.

https://www.mag.org/georgia/uploadedfiles/SBA_Comparison_P2.pdf
Comparison of EIDL to PPP
I am (hopefully) posting a link to a pretty concise description of the two different loan programs. The PPP is what small businesses really want. My understanding from several sources is that the EIDL applications are generally available, but that participating banks do not as of yet have the paperwork from their SBA lenders in order to accept applications for the PPP.

I have several banks as options. I don't want to approach all of them shopping for the best rate. Are the banks fees, etc. all the same with the PPP, or is there a benefit to shopping the deal?

Lockett,

My biggest concern with taking the PPPL is having to pay it back. The "up to 100% forgiveness upon approval" has me nervous. I feel confident I can hold on to my employees at reduced hours. As long as I don't have to fire anyone, am I guaranteed to get approved for conversion to grant status on 100% of the loan amount? Are there other factors that determine if you are approved for full or various amounts? Thanks in advance.

Just an Ag said:

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I have several banks as options. I don't want to approach all of them shopping for the best rate. Are the banks fees, etc. all the same with the PPP, or is there a benefit to shopping the deal?

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There are no fees with the loans. Click on my link above. In my OPINION, the only reason to choose a bank would be to make sure they are an approved SBA lender and from there I would just try to guess as to who could get you the funds the fastest.

FIDO95 said:

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Lockett,

My biggest concern with taking the PPPL is having to pay it back. The "up to 100% forgiveness upon approval" has me nervous. I feel confident I can hold on to my employees at reduced hours. As long as I don't have to fire anyone, am I guaranteed to get approved for conversion to grant status on 100% of the loan amount? Are there other factors that determine if you are approved for full or various amounts? Thanks in advance.

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As an idiot, I posted this yesterday:
The Idiot's Guide to the Coronavirus Emergency Loan Program

Regs have not been written on these loans as of yet. It would appear that your loan is forgiven to the degree that you maintain full employment for the period of the loan. I have been told that this would likely be calculated by FTEs for the loan calculation period in comparison to the period after the loan is accepted. Biggest issue is re-hiring employees by June 30th. Hope this helps and that someone more knowledgeable can have additional input.

FIDO95 said:

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Lockett,

My biggest concern with taking the PPPL is having to pay it back. The "up to 100% forgiveness upon approval" has me nervous. I feel confident I can hold on to my employees at reduced hours. As long as I don't have to fire anyone, am I guaranteed to get approved for conversion to grant status on 100% of the loan amount? Are there other factors that determine if you are approved for full or various amounts? Thanks in advance.

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The best advice I can start with is to run your business as if you did not get this loan and will not get any forgiveness. If you keep paying people to get forgiveness, then you probably aren't better off than if you didn't pay them and they got unemployment, while you got partial forgiveness. Those making under $60K will probably make more on unemployment than to work any reduced hours. Second, cash is king. Get the money and see if you need it. 4% for 10 years is probably worth it even if none is forgiven. There are no fees and no personal guarantee on these funds. There are no payments due for 6-12 months.

There are rules for how much of the loan would be forgiven. 3 basic conditions for forgiveness:
You can get up to the principal amount forgiven if your expenses during the 8 weeks after your loan starts your payroll, rent and utilties exceed the loan amount, and aren't reduced too much by the 3 conditions.

1. Reduction in FTE employees. As a ratio between the 8 weeks after your loan and 2/15/19-6/30/19.
2. Reduction in pay exceeding 25% comes off $ for $ once you cross 25%
3. No Reduction if you rehire by June 30 the same number people at same wages...

Here is a good technical summary from the National Association of Government Guaranteed Lenders

Cares Act 7(a) Loan Program provisions

Just an Ag said:

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I have several banks as options. I don't want to approach all of them shopping for the best rate. Are the banks fees, etc. all the same with the PPP, or is there a benefit to shopping the deal?

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Rates and fees should be the same everywhere. The SBA is waving all of their fees, and paying the lenders a 5% of the loan amount up to $350K handling fee, 3% for loans up to $2MM and 1% for over $2MM. Some places may still charge a fee for preparation/assisting in applications.

The "Deal" in my opinion is choosing a lender that will get your loan done in a timely fashion and one who understands the rules for the forgiveness portion, as it seems your lender will be the one to handle and decide on the request for forgiveness as well.

If I have an LLC with an s-corp election, do I mark my business as an LLC or as an S-Corp on the application? Does it matter?

our group dental office will be applying for the PPP/7a loan as well. Like you said, if it does what it says it does, it will be a huge help and help us get through the next month or two. We are doing sporadic emergencies but not much else.

Still waiting for the application to come online.

which one is this one

that is an emergency 10K one. Nothing wrong with applying for that one as well (we did), but that is not the big one that is 2.5 of your payroll and can be forgiven.

bangobango said:

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If I have an LLC with an s-corp election, do I mark my business as an LLC or as an S-Corp on the application? Does it matter?

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I'm not sure. I chose LLC for mine in the same situation... I assume once we get a further into the application it will be clarified.

Lockett:
Is a business owner who is the only employee at said business and was required to shut down eligible for that loan?

My understanding is you must have W2 or 1099 payments to qualify for the PPP, but I'm not the expert on that. The EIDL you should be eligible. And finally, you may be eligible for pandemic federal unemployment.

Thanks for the reply and for taking the time to post.

Here is a link to the SBA where you can find an example of the PPP application worksheet:

https://www.sba.gov/sites/default/files/2020-03/Borrower%20Paycheck%20Protection%20Program%20Application_0.pdf

It is a "sample" so it may change. It states Applications won't be accepted before April 3, 2020. Am I understanding all this correctly?

Here is a link to a clean, fillable copy. Banks/lenders will probably take these now, but the program officially begins Friday for wages, next friday for self employed...

https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf

Here is a link to Treasury guidance. It makes a MAJOR change to the language in the bill on forgiveness. It states that only 25% of the forgiveness can be from other than payroll categories.

https://home.treasury.gov/system/files/136/PPP%20Borrower%20Information%20Fact%20Sheet.pdf

The amount of your loan is 2.5 times your average monthly employment for 12 months. (Maximum loan amount).

The debt forgiveness is a function of two things and are based on an 8 week period:

(1) actual payroll costs for that period, and
(2) actual rent/mortgage/ utilities for your business.

Also you have to look at the number of employees that you either had employed in 2019 (2019 annual payroll tax form) or number of employees as of 2/15/20. You have to have the same amount of employees at the end of the 8 week period or you have to deduct some of your expenses from your debt forgiveness number (based on ratio of original employee count to employees at the end of the 8 weeks). Should look at what your maximum loan can be and figure our what your 8 week of employee costs and occupancy expenses will be and that will be the amount that will be forgiven- providing that you have the same number of employees. There is a good excel spreadsheet that show how to calculate both maximum loan and estimate loan forgiveness amount.

The whole premise of this Act is to get small businesses to hire their employees back (or keep them employed) and allow small businesses to keep their place of work. And at least 75% of the debt forgiveness amount has to be comprised of employee expenses.

Lot of moving parts.

Pelayo said:

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which one is this one

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EIDL loan. Could be a good loan for you, but it has to be paid back. The PPP is the loan program that is geared toward helping small businesses keep their employees and stay in their space.

FIDO95 said:

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Here is a link to the SBA where you can find an example of the PPP application worksheet:

https://www.sba.gov/sites/default/files/2020-03/Borrower%20Paycheck%20Protection%20Program%20Application_0.pdf

It is a "sample" so it may change. It states Applications won't be accepted before April 3, 2020. Am I understanding all this correctly?

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This is the application we received today at the bank. Applications are supposed to start online on Friday. Need a lot of documents - to be able to apply.

good info here!