$10,000 SBA Loan / Grant

$10,000 SBA Loan / Grant

Gregory SchwartzBusiness Member
Rental Property Investor · College Station, TX · Member since 2016 · 1k+ posts · 1k+ votes

Anyone else applying for an SBA Economic Injury Disaster Loan? Based on what I've read in the Stimulus Bill we all might be eligible for a 10k grant advance.

"(e) Emergency grant

(1) In general: During the covered period, an entity included for eligibility in subsection (b), including small business concerns, private nonprofit organizations, and small agricultural cooperatives, that applies for a loan under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) in response to COVID–19 may request that the Administrator provide an advance that is, subject to paragraph (3), in the amount requested by such applicant to such applicant within 3 days after the Administrator receives an application from such applicant.

(2)Verification: Before disbursing amounts under this subsection, the Administrator shall verify that the applicant is an eligible entity by accepting a self-certification from the applicant under penalty of perjury pursuant to section 1746 of title 28 United States Code.

(3) Amount: The amount of an advance provided under this subsection shall be not more than $10,000.

(4) Use of funds: An advance provided under this subsection may be used to address any allowable purpose for a loan made under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)), including—

(A) providing paid sick leave to employees unable to work due to the direct effect of the COVID–19;

(B) maintaining payroll to retain employees during business disruptions or substantial slowdowns;

(C) meeting increased costs to obtain materials unavailable from the applicant’s original source due to interrupted supply chains;

(D) making rent or mortgage payments; and

(E) repaying obligations that cannot be met due to revenue losses."

Those that are interested I applied at the sba.gov website 

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Member since 2019 · 13 posts · 24 votes
6y

Alright, I have an update, well, sort of. So I called the 1800 number of the SBA and talked to a rep after waiting about 1 hour. She was relatively nice. Following is the conversation:

Me: So I submitted the application Tuesday and I requested the $10,000 advance grant. Today's Friday. Where's my money, dawg? (just kidding, I did not say that last sentence)

Rep: It will take about 3 weeks before you get an email about your eligibility. 

Me: Huh? But Congress says 3 days in the law?

Rep: Well, the 3 days begins when we accept your application and process your eligibility , not when you submit it. (Now, I disagree. I think she's wrong, or the SBA is wrong). 

Me: OK, but Congress also said, I can still get the advance as a grant, even if I am later denied the loan. 

Rep: That is correct. That sure is a possibility (now we were on the phone, but I pretty sure I detected a "wink wink" here)

Me: So then why does it take 3 weeks? 

Rep: Because it does. Just keep watching your email and phone. They may email or phone you. 

Me: But I still don't understand... 

Rep: IT TAKES 3 WEEKS. KEEP WATCHING EMAILS. 

Me: Alright....

I am posting the text of the bill directly from Congress, and bold the relevant parts:

(e) Emergency Grant.—

(1) IN GENERAL.—During the covered period, an entity included for eligibility in subsection (b), including small business concerns, private nonprofit organizations, and small agricultural cooperatives, that applies for a loan under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) in response to COVID–19 may request that the Administrator provide an advance that is, subject to paragraph (3), in the amount requested by such applicant to such applicant within 3 days after the Administrator receives an application from such applicant.

(2) VERIFICATION.—Before disbursing amounts under this subsection, the Administrator shall verify that the applicant is an eligible entity by accepting a self-certification from the applicant under penalty of perjury pursuant to section 1746 of title 28 United States Code.

(3) AMOUNT.—The amount of an advance provided under this subsection shall be not more than $10,000.

(4) USE OF FUNDS.—An advance provided under this subsection may be used to address any allowable purpose for a loan made under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)), including—

(A) providing paid sick leave to employees unable to work due to the direct effect of the COVID–19;

(B) maintaining payroll to retain employees during business disruptions or substantial slowdowns;

(C) meeting increased costs to obtain materials unavailable from the applicant’s original source due to interrupted supply chains;

(D) making rent or mortgage payments; and

(E) repaying obligations that cannot be met due to revenue losses.

(5) REPAYMENT.—An applicant shall not be required to repay any amounts of an advance provided under this subsection, even if subsequently denied a loan under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(

So, I think the SBA is full of crap. They are putting up red tapes that are nowhere to be found in the laws while Congress has written the laws in so black and white that it doesn't even leave any room for interpretation. So right now the SBA is saying:

1) We haven't received your application. It is not "received" until we review it. 

-> No way. The text of the law says nothing about reviewing. "within 3 days after the Administrator receives an application from such applicant". We have a confirmation number. That mean SBA receives it. Period. 

2) What is this reviewing for eligibility crap? Congress also says in black and white: "the Administrator shall verify that the applicant is an eligible entity by accepting a self-certification from the applicant under penalty of perjury". 

-> We DID that self-certification in the application itself. That should be all that is required. 

--> Bottom line: I think they're playing games with us and the SBA is blatantly defying Congress. 

I think I am going to start writing to my Senators and Representatives. Let's make some noise

See this reply in the discussion

187 Replies

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  • Investor · Santa Clara, CA · Member since 2017 · 15 posts · 6 votes
    6y

    Have anyone heard from SBA regarding EIDL grant thingy? I've applied 4 days ago and nothing so far.

  • Investor · Boca Raton, FL · Member since 2017 · 108 posts · 18 votes
    6y

    how is the govt going to know you have rent loss... its  such a small amount ..curious what others here think..lets say you put $3000 loss rent.how do they verify?

  • Palo Alto, CA · Member since 2017 · 230 posts · 200 votes
    6y

    For assisting somebody to apply for PPP, I heard some lawyer quoted $5k to file for my friend's company.   My wife's company has a specialized department that handles this type of thing, they are charging $2500 per application.     

  • Member since 2020 · 5 posts · 1 vote
    6y

    It was a really simple process took me about five minutes earlier this week, silly to pay someone else even $100 to do it for you...

  • Accountant · Fairhope, AL · Member since 2017 · 34 posts · 19 votes
    6y

    @Paul Isaac @Edward Liu

    You can also be paid a cut if the banks fee for helping prepare the PPP. 

  • Peoria, IL · Member since 2013 · 967 posts · 383 votes
    6y
    Originally posted by @Paul Isaac:

    It was a really simple process took me about five minutes earlier this week, silly to pay someone else even $100 to do it for you...

     I'll do it for $3k! jk.  was easier to go out & fill out the form than to read all the comments on here.  I'm little slow took me 10 minutes. 

  • Rental Property Investor · UT · Member since 2018 · 80 posts · 14 votes
    6y

    I would assume/understand that the COGS would be Zero for a Buy and Hold Rental Portfolio. Anyone disagree?

  • Member since 2019 · 2 posts · 0 votes
    6y

    Can you use future revenue loss projections for the application?

  • Accountant · Fairhope, AL · Member since 2017 · 34 posts · 19 votes
    6y

    @Jared Smith Agreed


    @Thomas D Armistead I don’t think anyone really knows at this point. 

  • Rental Property Investor · Member since 2018 · 23 posts · 9 votes
    6y

    I am trying to fill out the application, can anybody advise what they are doing for cost of goods sold as well as lost rent? I have two rental properties, a single family and a townhome. Thanks in advance for any guidance!

  • Wilmington, NC · Member since 2017 · 132 posts · 70 votes
    6y

    The 10K does not have to be repaid. If you get a PPP loan and are granted forgiveness, the 10K is deducted from the amount forgiven. Landlords can apply for EIDL as detailed in SBA's standard procedure for disaster loans. From what I've heard, no banks are yet ready to process PPP apps b/c SBA has not issued guidance that's specific enough. If anyone's gotten a PPP app accepted by a lender, I'd love to know about it. Thanks.

  • Accountant · Fairhope, AL · Member since 2017 · 34 posts · 19 votes
    6y

    @William Dubinsky

    I put $0 for COGS. and estimated a few months lost rent. The guidance isn’t clear so that is mostly a judgement call. 

  • Rental Property Investor · Member since 2018 · 23 posts · 9 votes
    6y

    @Zach Fetcko thank you for you feedback!

  • Member since 2019 · 13 posts · 24 votes
    6y

    Alright, I have an update, well, sort of. So I called the 1800 number of the SBA and talked to a rep after waiting about 1 hour. She was relatively nice. Following is the conversation:

    Me: So I submitted the application Tuesday and I requested the $10,000 advance grant. Today's Friday. Where's my money, dawg? (just kidding, I did not say that last sentence)

    Rep: It will take about 3 weeks before you get an email about your eligibility. 

    Me: Huh? But Congress says 3 days in the law?

    Rep: Well, the 3 days begins when we accept your application and process your eligibility , not when you submit it. (Now, I disagree. I think she's wrong, or the SBA is wrong). 

    Me: OK, but Congress also said, I can still get the advance as a grant, even if I am later denied the loan. 

    Rep: That is correct. That sure is a possibility (now we were on the phone, but I pretty sure I detected a "wink wink" here)

    Me: So then why does it take 3 weeks? 

    Rep: Because it does. Just keep watching your email and phone. They may email or phone you. 

    Me: But I still don't understand... 

    Rep: IT TAKES 3 WEEKS. KEEP WATCHING EMAILS. 

    Me: Alright....

    I am posting the text of the bill directly from Congress, and bold the relevant parts:

    (e) Emergency Grant.—

    (1) IN GENERAL.—During the covered period, an entity included for eligibility in subsection (b), including small business concerns, private nonprofit organizations, and small agricultural cooperatives, that applies for a loan under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) in response to COVID–19 may request that the Administrator provide an advance that is, subject to paragraph (3), in the amount requested by such applicant to such applicant within 3 days after the Administrator receives an application from such applicant.

    (2) VERIFICATION.—Before disbursing amounts under this subsection, the Administrator shall verify that the applicant is an eligible entity by accepting a self-certification from the applicant under penalty of perjury pursuant to section 1746 of title 28 United States Code.

    (3) AMOUNT.—The amount of an advance provided under this subsection shall be not more than $10,000.

    (4) USE OF FUNDS.—An advance provided under this subsection may be used to address any allowable purpose for a loan made under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)), including—

    (A) providing paid sick leave to employees unable to work due to the direct effect of the COVID–19;

    (B) maintaining payroll to retain employees during business disruptions or substantial slowdowns;

    (C) meeting increased costs to obtain materials unavailable from the applicant’s original source due to interrupted supply chains;

    (D) making rent or mortgage payments; and

    (E) repaying obligations that cannot be met due to revenue losses.

    (5) REPAYMENT.—An applicant shall not be required to repay any amounts of an advance provided under this subsection, even if subsequently denied a loan under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(

    So, I think the SBA is full of crap. They are putting up red tapes that are nowhere to be found in the laws while Congress has written the laws in so black and white that it doesn't even leave any room for interpretation. So right now the SBA is saying:

    1) We haven't received your application. It is not "received" until we review it. 

    -> No way. The text of the law says nothing about reviewing. "within 3 days after the Administrator receives an application from such applicant". We have a confirmation number. That mean SBA receives it. Period. 

    2) What is this reviewing for eligibility crap? Congress also says in black and white: "the Administrator shall verify that the applicant is an eligible entity by accepting a self-certification from the applicant under penalty of perjury". 

    -> We DID that self-certification in the application itself. That should be all that is required. 

    --> Bottom line: I think they're playing games with us and the SBA is blatantly defying Congress. 

    I think I am going to start writing to my Senators and Representatives. Let's make some noise

  • Real Estate Agent · Jacksonville, FL · Member since 2015 · 1k+ posts · 1k+ votes
    6y

    Perhaps I have grown cynical. I generally take anything elected officials with a grain of salt. I have no confidence in any of them. These are the people that brought you the last housing crisis, FEMA, deficit spending, endless wars in the desert a 55,000 page tax code.

    The logistics of delivering a million payments based on an application, that yields different amounts and rejects non-qualified businesses.  Get comfortable, this could take a while.

    They need 3 weeks to send out direct payments to accounts on file with the irs?

  • Developer · New York City, NY · Member since 2015 · 812 posts · 718 votes
    6y
    Originally posted by @Edward Liu:

    For assisting somebody to apply for PPP, I heard some lawyer quoted $5k to file for my friend's company. My wife's company has a specialized department that handles this type of thing, they are charging $2500 per application.

    NFN, anyone trying to profit on these small business owners trying to say afloat and keep employees on the books are real pieces of ****. BTW, it's not hard to do on your own. There should be no reason why anyone should need some of these scum sucking POS ppl. 

    Here's what you need for the PPP.

    1) A copy of your 941

    2) Formation or incorporation docs. If sole-prop., a copy of your business license filed with the city/town/county you operate.

    3) Profit and loss statement for last year and/or this year up until the disaster happened.

    4) Wages, which include health benefits and retirement benefits. Must exclude taxes and FICA.

    5) Copy of most recent tax return. Recommended, not required.


    Done. I know this as a banker already told me what they are looking for earlier in the week. Now, instead of sending these POS's 2500+, just donate some money to your favorite charity for your good BP friend Cal. ;'p

  • Flipper/Rehabber · Colorado Springs, CO · Member since 2015 · 36 posts · 25 votes
    6y

    Basically we got guideance about 6:30 last night from SBA to start the PPP today. The form & terms changed several times and there is still a lot of misinformation out there. There are many questions from the liability perspective of the bank before jumping in so banks are preceding with caution. It's not really "free money" from the government for the bank as we do the loan and then are "suppose" to be reimbursed by SBA. Guidance is very vague to prudence is required. SBA has a tendency to say guaranteed and then try to get out of it. I have been working on this for over a week for our bank and we are accepting some apps now however the portal we submit to was not working today. To my knowledge non sba certified banks still don't have a portal to submit to yet. It will get going I expect late next week but right now our SBA reps don't have any answers to questions that must be answered to determine risk and liability. This was thrown together at the last minute so no one has any training on the program. The form is very easy to fill out on your own. Just provide documentation stating avgerage monthly for 2019 certified by you. SBA will supposedly buy these from the bank 7 weeks after the loan is made so you will need to document the salary you paid for that period of time to be submmitted for foregivness. 

  • Investor · Starkville, MS · Member since 2017 · 25 posts · 5 votes
    6y

    Applied. Let's see where it goes! 

  • Investor · Boca Raton, FL · Member since 2017 · 108 posts · 18 votes
    6y

    My tenant paid April rent but unsure about future rents should I apply for 10k grant for potential future months loss rent just in Case or wait and see? Don't want EIDL funds to be depleted before I have a chance to apply in Case I do need. Just want to be prepared

  • Rental Property Investor · New York City, NY · Member since 2017 · 493 posts · 386 votes
    6y

    Dont shoot the messenger..

    SBA came out with new guidelines for the DLA loan/Grant.. It was wishful thinking but most of us will not qualify unless you have Employees.. If you have payroll/employees you can still qualify but if you're just a landlord w tenants best we can hope for is our tenants getting their stimulus checks soon, we will not qualify for this loan..

    Who knows maybe they'll do another change, I hope so....

  • Member since 2019 · 13 posts · 24 votes
    6y
    Originally posted by @Raul R.:

    Dont shoot the messenger..

    SBA came out with new guidelines for the DLA loan/Grant.. It was wishful thinking but most of us will not qualify unless you have Employees.. If you have payroll/employees you can still qualify but if you're just a landlord w tenants best we can hope for is our tenants getting their stimulus checks soon, we will not qualify for this loan..

    Who knows maybe they'll do another change, I hope so....

    Yes I saw the slides they put out as guidance and the reddit threads. I have so many issues with that though.

    1. The SBA themselves said “sole proprietor with or without employees”. In the application itself it also says that. 
    2. They do not have authority to require businesses to have employees in order to qualify for the grant. The law as written in black and white by the US Congress directed the SBA to accept the self-certification as proof. Nothing else required further. This is a blatant violation of a law that was passed by the US Congress and signed by the President. 

    So in essence, the SBA, the Agency whose job is to disburse money from the Federal Government to small businesses, has taken upon themselves to decide to screw the very small businesses they supposed to protect. What the hell is this? Who are they to decide that small businesses with no employees do not deserve any money, in the times that those are the people get hit the hardest. And I am not talking about myself, I am talking about the one man barber shop that I go to, that was ordered to shut down by our Governor. I am talking about the local boutique jewelry or clothing shops that their owners work their asses off 7 days/ week. I’m talking about the my local sushi guy who has a small booth at our local mall who I’ve been going to lunch for the last 10 years ever since I was in college. Guy works 7 days/week for the last 15 years. Last month the mall was closed to slow the spread of the virus. Who’s gonna pay his rent, his mortgage, if he can’t work? Omg, what about the lady I know who runs a yogurt shop, who is a single mom and has a kid with disability. 

    This is wrong. What they’re doing is wrong. If those people are not the definition of small businesses in America, I don’t know what is. I am going to write and tweet and call all of my senators and representatives. We cannot let them get away with this.

  • Member since 2020 · 5 posts · 1 vote
    6y

    I haven’t received anything either, I suppose that I am going to have to withdraw from one of the two houses I purchased, and may lose the deposit of 10%. I am not in a situation to where I can afford to sit on two empty houses for six months now that I have added a two month delay on the closings too. This sucks a lot too, because I am disabled with Asperger’s and have never been able to keep a job, but have been finding success flipping houses until now 😓

  • Member since 2019 · 13 posts · 24 votes
    6y
    Originally posted by @Pace Jordan Morby:

    I had a Tax Professional and an Attorney on my Facebook Group yesterday. We spoke about this for an hour and a half. It answers everyones questions. VIDEO WITH TAX PRO AND ATTORNEY

    Thank you for doing that video. That was great, has a lot of great content and very helpful. I watched the whole thing.

    However, the question in everybody’s mind right now is if we ever gonna get the “up to $10,000 grant” and how much we would get really. Over the last few days, we hear a lot of different things, conflicting information but there are some common themes starting to emerge, based in various conversations people had with SBA reps and even some SBA regional directors:

    1. Not everyone will get $10,000.

    2. How much one will get will depend on some sort of sliding scale the SBA arbitrarily comes up with that involves the # of employees.

    3. The obvious fact that they ignored the Congressional mandate of disbursing the funds within 3 days. Today is day 7 after the application opened and no one in this country has gotten a dime from this supposedly “emergency advance”.

    The thing I take great issue with, is the “based on number of employees” stuff. They just pulled that ou of thin air. I don’t want to blame the SBA either, but in this case, doesn’t it seem like they overstep their authority and defy Congress? Congress says: “The Administrator SHALL disburse the amount requested within 3 days to the businesses”. Congress didn’t say: “The SBA shall develop some sort of sliding scale based on income and number of employees” . In basing the grant on number of employees, they’re basically screwing the majority of the sole props, all the stores and shops that are owner-run, no employee, sorry no help for you. What kind of crap is this. 

    Now I think we can all understand the 3 days is a tall order. Everybody gets that. It’s the lack of information and transparency from the SBA that is astounding. They could have released what they think is a realistic timeframe “Guys, we think 3 days is a wet dream, we think it’ll take 3 weeks or 5 weeks or whatever. Here is why: we have to do x, y, z...” or “Guys, here will be the formula we use: we take your gross avenue minus your COGS divide by 12 times number of employees”. Whatever the hell, talk to the public, provide information to the people they’re supposed to serve. Don’t act like they’re doing us a favor and we owe them something for doing their jobs.

  • Accountant · Fairhope, AL · Member since 2017 · 34 posts · 19 votes
    6y
  • Member since 2019 · 13 posts · 24 votes
    6y
    Originally posted by @Zach Fetcko:

     Thank you! I feel like this is 1920 not 2020, and we’re waiting in a breadline for some government bureaucrat to come throwing some crumbs at us.

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