All Forum Posts by: David H.

Hi Dan,

1. Yes you can apply before they miss rent, you are allowed to make reasonable projections.

2. You do not need to have any employees to get an EIDL, so 0

3. The EIDL grant is not live yet, should be this week. You should not be documenting payroll for this, the PPP loan is for payroll specifically and the forgivable portion is a complicated process that does not apply for the EIDL loan or EIDL grant. The Grant is given simply upon making application for the grant and requesting the advance, it is disbursed in 3 days. You do not need to be approved for the Grant, you can get it even if you are denied the loan.

4. I would estimate your loss based on projections if it were me. I would submit a set of porjections with detailed assumptions. Something like "My tenants lease ends on 5.31.2020 and my state is under lockdown. I can't show my apartment due to social distancing. I expect for this to minimally go on for xxx months and maximum go on for xxx months. Also I highly suggest filling out the schedule of liabilities to demonstrate how much your bills are as this may impact loan amounts. 

Hi Everyone,

Please see the following link for a list of SBA webinars on applying for EIDL loans from the Richmond, VA office.

https://www.eventbrite.com/e/w...

Similar webinars are being hosted every business day in every state in the country. These are great to attend, free and at the end you can ask the moderator questions. I suggest any and all to utilize this.

Best of luck!

Hi Tom,

The SBA would go in second, third / behind whatever mortgages or liens you already have in place. Most lenders would not have a problem with this as it does not impact their lien position. I can't speak for all lenders, but I have personally never seen someone coming in second after the loan is already been done be an issue.

Thanks Mike,

You are correct, the general calculation is Gross Profit for the year prior / 2 .. i.e. 6 months of gross profit = total loan amount.

The grumblings I have heard are that you can demonstrate through projections and the schedule of liabilities the need for more of a loan. As Rental owners we often try to make the gross profit as close to zero as possible so this 6 month standard method is unattractive.

One big win from the CARES Act is that EIDL loans under $200,000 no longer require a personal guarantee.

Also, if you have already applied for the EIDL, you can still go back and apply for the $10,000 advance grant, which I highly suggest, as it is a grant so it does not need to be paid, and it must be distributed to you in 3 days, regardless of approval. They expect to have this feature live this week. The first 1 million businesses can access this... I expect many more than 1 million will apply so I'd go for this as soon as its live.

Hi Russell, 

EIDL Disaster Loans are eligible for rental property owners and STR's.

The new SBA 7a Paycheck Protection Program (PPP) Loans coming from the new CARES Act are not eligible for Rental Propery owners, and are unlikey to be for STR's. They may, but I doubt it for the following reasons.

The PPP Loan program loan amounts are calculated based off of payroll information, such as the IRS Form 941. Unless you have a large staff as a part of your STR business I doubt that the PPP loan would be better suited even it STR's were eligible.

The EIDL loan allows for you to account for lost rent due to the disaster, the PPP loan will not use that.

Also the "forgivable" portion of the PPP loan is a marginal. Its for an 8-week period after the loan is issued only, and it must be documented and only applies to mortgage interest / rent payments (not rent income), utilities, payroll, paid sick medical leave, and insurance premiums. This forgivable loan amount is unlikely to benefit rental property owners with little to no staff.

Thanks Bryce,

STR's are typically not eligbile for SBA 7a loans. That being said, neither are non-profits, and they will be eligible for the PPP Program.

Something to consider though is that the PPP Program loan amounts are calculated specifically from 2019 payroll data, likely all will be verified and calculated from IRS Form 941. If the STR owner has been filing a 941 they may be able to receive relief, but my thoughts are it will be marginal compared to the benefit from the EIDL Loan as that loan accounts for lost rental income due to the disaster and the PPP loan does not. 

@Hari Narayanan

Hi Hari, all 50 states have signed up so far.

California is good to apply for EIDL

@Bryce Cutler

Hi Bryce and Mike,

The SBA Paycheck Protection Loan program that is coming from the CARES act is not eligible for rental property owners, only small businesses and non-profits.

The SBA bridge loan is unlikely to be a good option and may not even be eligible for rental property owners, though I’m not sure. Many banks are refusing to do the bridge loan as it caps at $25k and will bog down their processing department. The banks will be focusing on the PPP program.

Also, the SBA bridge program requires that the borrower have an existing relationship with the bank issuing the loan. Also, the bridge program has a guarantee fee which the other programs don’t and the interest rate will be much higher, prime + 6.5%. Even if rental owners could get the bridge loan, I would advice against this.

For rental property owners the EIDL loan is the only option as far as SBA goes.

@Vinci S.

Hi Vinci,

The site has been evolving as there has been more volume than ever designed for.

Form my understanding you need to upload the forms. I don’t know what the final screen looks like in terms of a submit button. I work for a bank doing SBA lending, and these loans come straight from the SBA and keep changing, so there’s unfortunately only so much I can say for certain.

Best of luck!

@Scott F.

Hi Scott,

EIDL loans come directly from the SBA, no banks are involved

Apply at: disasterloan.sba.gov/ela

I believe there is a notice on the site now about the $10k grant too. It’s not in practice yet but it’s got an interesting notice on it