All Forum Posts by: David H.

@Joyce Williams

Hi Joyce I’m not sure what your referring to.

There are two elements of the EIDL loan/grant program now

The new streamlined application allows for you to request an advance, which will be up to $10k, and it is a grant. I.e. it does not need to be paid back. Also even if you are not approved for the loan, you may Keep the grant.

The streamlined application that offers the grant is also the first step in applying for the EIDL loan, which has terms of 3.75% fixed rate for small businesses and a term of up to 30 years

@Cory Binsfield

Thank you so much for sharing your experience Cory!

Fantastic!

@Don Spafford

Honestly Don there has not been clear guidance given on this yet. I think most people are treating COGS as operating expenses.

The SBA just simply hasn’t provided enough clear guidance to rental property owners on these specifics.

I highly suggest you and all those with questions participate in the daily calls from the New Hampshire District at 9am and 2pm EST

The number is 2o2-765-I264 and the access code is 522409519#

The call at the end allows for people to ask questions. I’m sure other states are offering this as well. I was on it again today and they answered some questions of mine

@Nate T.

Hi Nate,

It looks as if they are changing the PPP program daily at this point.

Please see the treasury site for what appears to be most current parameters, which are frankly vastly different than anything we were led to believe.

Home.treasury.gov/cares

Hard to believe this is where it’s at now, most likely it will change again.

@Jeff Sheraton

Hi Jeff,

That was my understanding from the conference calls I have been on. This program and application process has constantly been evolving, so it is impossible to say for sure.

Also, please consider I do not work at the SBA.

I can only provide so much help.

@Lauryn Meadows

Hi Lauryn,

These EIDL loans will not be forgiven. There is currently a $10k grant that can be applied for. See links above.

The loan forgiveness people are referring to is a component of the new Paycheck Protection Program loan. The PPP loan is likely NOT eligible for rental property owners.

Also, if it were, the PPP loan size is based off of payroll from the prior 12 months times 2.5. Most rental property owners have limited payroll, even if for independent contractors.

Also the forgiveness is only for an 8 week period after the loan origination and the funds must be used for specific purposes, such as payroll. It is incredibly important to understand the PPP loan is not a blanket forgivable loan, there are strict rules attached, and it is likely NOT eligible for rental properties.

@Corey Demers

Hi Corey,

It is my understanding that rental properties / passive income businesses (except for self storage and hotels) are ineligible for PPP

The PPP loan is a 7a derivative, 7a loans historically do not permit rental businesses

Additionally, the PPP loan amount could factor in contractors and the like. The max loan amount calculation is essentially payroll for the prior 12 months X 2.5 or $10million, whichever is less.

The key thing to understand is the “loan forgiveness” only applies to an 8 week period starting from the date of loan origination, and only forgives eligible uses of proceeds.

If a small biz has $100,000 in prior year salary multiply by 2.5 they could get $250,000. The 8 week period will almost always be smaller, because of course it would, and the borrower would be left eight a larger loan on a shorter term than the EIDL.

Obvious benefits are no personal guarantee (technically if you use proceeds the wrong way there is recourse) and no collateral.

But again, I must stress, for the purpose of this forum, I am 99% sure the PPP loan is NOT eligible for rental properties. This could change, as many things have, but as of now, it’s doesn’t look like it.

@Damian Klime

Hi Damian,

E) Repaying Obligations that cannot be met otherwise due to the disaster...in my opinion this would cover taxes as this is a broad and roomy category

Technically your taxes are an obligation and you are saying you can’t meet them due to lost rental income due to the disaster.

Please note, This is just my opinion and only the SBA could say for certain.

@Ryan Miller

Hi Ryan, there is really two elements to the EIDL grant/loan.

As of Friday, the EIDL loan now has the option to apply for an “advance” which is a grant of $10k

That being said, you must use the proceeds of the EIDL as intended by the SBA.

There are only 1 million $10k grants available and there are over 30 million small businesses. Something to consider.

@Courtney Duong

I’m not sure Courtney as I do not know your tenants situation as to why they can’t take anymore loans.

They can certainly try to apply and from my understanding they can receive the grant and turn down the loan if they don’t like the terms.

Honestly I cant advise on these types of situations.