$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

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  • Natalie KolodijBusiness Member
    Moderator
    Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
    6y
    Originally posted by @Jared Smith:

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

     That is correct. 

    You have no inventory- inventory is parts/items held for resale. No inventory= no COGS.

  • Investor · Bay Area, CA · Member since 2014 · 11 posts · 1 vote
    6y

    I have 4 different LLC for different rental homes.. should I apply EIDL application for rental loss once or 4 separate applications?

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

    @Jats A. I would apply on four separate. 

  • Member since 2020 · 2 posts · 2 votes
    6y

    I applied for EIDL on 3/30 and received an email from SBA on 4/13 stating below:

    "On March 29, 2020, following the passage of the CARES Act, the SBA provided small business owners and non-profits impacted by COVID-19 with the opportunity to obtain up to a $10,000 Advance on their Economic Injury Disaster Loan (EIDL). The Advance is available as part of the full EIDL application and will be transferred into the account you provide shortly after your application is submitted. To ensure that the greatest number of applicants can receive assistance during this challenging time, the amount of your Advance will be determined by the number of your pre-disaster (i.e., as of January 31, 2020) employees. The Advance will provide $1,000 per employee up to a maximum of $10,000"

    So, if the business doesn't have any employees, it qualifies for none.

  • Rental Property Investor · Dayton, OH · Member since 2016 · 210 posts · 160 votes
    6y

    thank you for sharing.

  • Member since 2020 · 2 posts · 2 votes
    6y

    Another update - Just completed a call with SBA for the status on my EIDL this morning and asked SBA's rep about whether self-employed business without employees would receive any $1,000. She said everyone would receive something and self-employed people are considered employees. 

    Obviously, this update doesn't come from a very reliable source (SBA's rep). Just wanting to share.

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

    just got 1k credit

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

    @Ivan Gorokhov did you list yourself as an employee and put one in that blank or just put zero?

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

    @Zach Fetcko   0 , but i think they counted self employed landlord as 1 employee

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

    @Ivan Gorokhov Great to know. Thank you. 

  • Rental Property Investor · Dayton, OH · Member since 2016 · 210 posts · 160 votes
    6y

    Does anyone have the link of where to find this?  I had it but when I heard you had to have employees I deleted it.

    Thank you

  • Accountant · Saint Paul, MN · Member since 2018 · 26 posts · 8 votes
    6y

    I had seen the loan application yesterday but I am seeing this today 

    Notice: Lapse in Appropriations
    SBA is unable to accept new applications at this time for the Economic Injury Disaster Loan (EIDL)-COVID-19 related assistance program (including EIDL Advances) based on available appropriations funding.

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

    I had seen the loan application yesterday but I am seeing this today 

    Notice: Lapse in Appropriations
    SBA is unable to accept new applications at this time for the Economic Injury Disaster Loan (EIDL)-COVID-19 related assistance program (including EIDL Advances) based on available appropriations funding.

    Shocker.

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

    Also heard this morning that funds have run out on the PPP. Hopefully congress will allocate more funds in the next week or so. In the meantime contact your congressperson or senator and let them know that you were left out and it will affect your ability to retain employees. 

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

    was this basically a free 1k?

  • Burlington, KY · Member since 2013 · 58 posts · 65 votes
    6y

    I have a new Inquiry from sba. Guess they are processing my EIDL loan / grant maybe. Though they ran out of money.

  • Rental Property Investor · Huron, OH · Member since 2015 · 40 posts · 7 votes
    6y

    I applied in March. Still haven’t heard a thing except for some inquiries on my credit. Starting to wonder if I’ll get anything. 

  • Investor · Santa Clara, CA · Member since 2017 · 15 posts · 6 votes
    6y
    Originally posted by @Account Closed:

    was this basically a free 1k?

    Yes, I think so

  • Burlington, KY · Member since 2013 · 58 posts · 65 votes
    6y
    Originally posted by @James Defazio:

    I applied in March. Still haven’t heard a thing except for some inquiries on my credit. Starting to wonder if I’ll get anything. 

     Yes. I also applied as soon as I heard about it. We'll see.

  • Member since 2020 · 2 posts · 0 votes
    6y

    Just wanted to provide feedback, as this forum has been helpful in helping me evaluate my own situation.

    I applied 03/30/2019. Never received an e-Mail or a phone call. Received $6k on 04/17/2019. My number of employees listed was 6. I am an LLC S-Corporation. I am not a landlord and had no rental income losses.

  • Member since 2020 · 2 posts · 0 votes
    6y

    Just wanted to provide feedback, as this forum has been helpful in helping me evaluate my own situation.

    I applied 03/30/2019. Never received an e-Mail or a phone call. Received $6k on 04/17/2019. My number of employees listed was 6. I am an LLC S-Corporation. I am not a landlord and had no rental income losses.

  • Kenneth GarrettPro Member
    Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
    6y

    I received $1000 EIDL money. One LLC multiple properties. I applied 3 weeks ago. I thought I would jeopardize the funding by applying multiple times with different LLC's. I also thought it would be 10K. Rules came out about the $1K per employee up to 10 after I applied. It will help for the delinquent rent. Not sure what the future will hold.

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

    @Kenneth Garrett Thanks for letting us know. 

  • Rental Property Investor · Los Angeles, CA · Member since 2016 · 172 posts · 122 votes
    6y

    I applied about 3 weeks ago through the SBA EIDL page and I have not heard anything about an update on my loan.

  • Gregory SchwartzBusiness Member
    OP
    Rental Property Investor · College Station, TX · Member since 2016 · 1k+ posts · 1k+ votes
    6y

    There is hope for us all!!

    I had a random credit check, it turns out it was the SBA. Then after a month of no contact, no verification of my business, the SBA dropped $1,000 into my bank. Naturally, I'm spending it immediately on a big screen TV...JK, it will help buffer my delinquent tenants late rent. 

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