Today is the first day for the Self-Employed or Independent Contractors to apply for a Paycheck Protection Program loan.
Am I eligible?
If you have a business, not including rentals of commercial or real property, that was in operation as of February 15, 2020, you are eligible.
How much is the loan?
The loan is for 2.5 times your average monthly self-employment income from 2019 – or from the first few months of 2020 if it were a new business.
How do I apply?
The application is done through a bank who is registered to participate in the Small Business Administration 7(a) loan program, but the SBA is working to get more lenders approved to offer the loans.
It is recommend that you go through the bank where your business has accounts or loans already. We are hearing that some banks are limiting and/or cutting off the applications. If your bank is not taking more applications then there is www.lendio.com and a rumor that Intuit will be offering loans soon. We do not recommend or endorse any particular lender, just giving you some options that we have heard of.
What do I need when I apply?
You will need your 2019 tax return which reflects your self-employment income. If you need a copy, we can get a .pdf of your return to you, please email the office.
There may be other documents that your lender will require. We are here to help you with whatever we can provide.
Is there a charge to apply?
The SBA has waived their application fees, but the banks are able to charge a fee. Our office is not allowed to bill you for our services to help you obtain these loans.
Is the loan forgivable?
To the extent that the loan is used for “payroll costs,” mortgage interest, rent, and utilities within 8 weeks of the funding date, you can apply to have that portion of the loan forgiven. Self-Employment income is considered to be a “payroll cost.” The SBA has not issued guidance on this part of the loan forgiveness process, so we cannot offer you any specifics.
Also, to the extent that you actually receive an Economic Injury Disaster Loan Advance, which we still have not heard of a single business receiving, you must reduce that forgivable part of the loan by the Advance.
What are the terms of the unforgiven part of the loan?
If any part of the loan is not forgiven, there is a six month deferral of payments on the loan (interest will keep accruing.) The interest rate for these loans is between .5% and 1.0% and the payment term is two years.
Our office is here to assist you in any way we can. Please contact us via email with questions.
STIMULUS PAYMENTS: IRS released IR-2020-61 regarding the $1,200 payments for each taxpayer and $500 for each qualifying child. They will start going out in the next three weeks, but only to taxpayers who have filed 2018 or 2019 returns. Taxpayers who have not filed will need to file 2018 or 2019 in order to get the stimulus, but the stimulus will still be paid out throughout the rest of 2020. The IRS will be setting up a portal for taxpayers to enter or change their bank information, but it is not ready yet, so don’t get scammed.
Due to the economic impact of the coronavirus, the US Government has authorized the Small Business Administration to offer Economic Injury Disaster Loans to any business with 500 or less employees, non-profits, self-employed, independent contractors, and landlords of commercial or residential rentals.
The Disaster Loans come with a provision that an Advance of $10,000 is offered to any applicant, whether the loan is approved or denied. The Advance does not have to be paid back.
The application can be found at https://covid19relief.sba.gov/#/
I suggest that your business apply for the loan and advance as soon as possible.
If you need assistance with the application, a potential Paycheck Protection Loan, or the SBA Loan Forgiveness, please contact us.
We will be continuing the review the options to assist our clients through this difficult time.
If you have any questions, please contact us.
Oregon Governor Brown has extended the deadline for filing Oregon returns to July 15, 2020. More details will be released this afternoon by the Department of Revenue.