SBA EIDL Loans are ELIGIBLE for Rental Properties

Private Lending & Conventional Mortgage Advice

SBA EIDL Loans are ELIGIBLE for Rental Properties

Rental Property Investor · Portland, ME · Member since 2019 · 160 posts · 231 votes

ATTENTION LANDLORDS!

SBA Economic Injury Disaster Loans (EIDL) are eligible for Rental Property Owners.

Standard SBA Loans are not available for passive income (except Hotels and Self Storage)...

THESE ARE NOT NORMAL SBA LOANS

During Disasters the SBA Disaster Loan Programs expand the eligibility to non-profits and even homeowners in certain circumstances.

Please visit https://www.sba.gov/sites/defa...

See slide 7, which clearly states that Rental Property Owners are Eligible for relief.

Please understand there will be a massive bottleneck and these loans could take 4-12 weeks to actually hit the streets. If you need one of these loans, COME PREPARED. Follow the directions in that slide deck. Fill out forms right the first time. The SBA is NOT staffed for a nationwide disaster. These loans are not coming from banks, they are coming from the SBA, this will take a while. It will be first come first serve.

Loans may be up to $2MM secured and up to $25,000 unsecured

The historical approval of these loans is < 60% . I'm not saying you can or will get these loans. I'm only providing this information in the hopes it will help those property owners in severe distress in the coming weeks/months. This economic disaster WILL be worse than most expect. Plan accordingly.

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Natalie KolodijBusiness Member

Moderator

Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes

6y

A few quick notes....

You shouldn't be putting any thing for COGS- rentals don't have this. This only applies to businesses with inventories.

The applications ask for lost rents- that's what relates to you.

Also worth noting- no one has received this loan advance/grant yet. Contacts at the SBA are saying 2-3 more weeks.

Also worth noting there's no guarantee you'll receive $10k as a non -repayment grant. The wording in the act notes the advance is "Up to $10,000". It is totally up to the bank how much they approve.

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Scott F.
Property Manager · TX · Member since 2017 · 15 posts · 4 votes
6y
@David Huli
The stimulus bill signed yesterday has an EIDL grant for $10K for sole proprietors if used for the mortgage. It appears this would apply to Landlords as well.
1 Reply
David H.
OP
Rental Property Investor · Portland, ME · Member since 2019 · 160 posts · 231 votes
6y
@Scott F.
You are correct, there is a $10,000 grant eligible for landlords as well. It’s not implemented just yet, but the mechanism is an advance that is requested upon application , this advance must be paid by the SBA to the applicant in 3 days. The applicant can keep the $10k and doesn’t need to pay back even if denied the loan.
0 Reply
Daniel DietzPro Member
Rental Property Investor · Reedsburg, WI · Member since 2011 · 1k+ posts · 857 votes
6y
Does anyone have any insight as to when we own properties in a 3 member LLC? I am guessing it is the LLC that would be eligable since it has it's own EIN#, not EACH of the landlord/owners?

Thanks, Dan Dietz
[email protected]608-524-4899
0 Reply
Scott F.
Property Manager · TX · Member since 2017 · 15 posts · 4 votes
6y
@Daniel Dietz
Not sure, maybe under 7(a), but there you only get credit for the interest (assuming you want loan forgiveness).
0 Reply
Scott F.
Property Manager · TX · Member since 2017 · 15 posts · 4 votes
6y
@David Hulit
Excellent, do we apply through the SBA or banks like Santander?
0 Reply
David H.
OP
Rental Property Investor · Portland, ME · Member since 2019 · 160 posts · 231 votes
6y
@Daniel Dietz
Hi Daniel,
You're most likely going to fill it out for the LLC in this situation
Typically, The loan would require all owners with 20% or greater to personally guarantee the loan. There has been an amendment however waiving personal guarantees for loans under $200,000
0 Reply
David H.
OP
Rental Property Investor · Portland, ME · Member since 2019 · 160 posts · 231 votes
6y
@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
1 Reply
Jason Bilbrey
Investor · Stevens Point, WI · Member since 2018 · 88 posts · 25 votes
6y
If rentals are not in an LLC and are owned directly by me, what should I put in the "Business Legal Name" and "Trade Name" fields of the SBA EIDL loan application?
3 Reply
James Sigsbee
Rental Property Investor · Marietta, GA · Member since 2014 · 41 posts · 24 votes
6y
@Jason Bilbrey - did you get an answer on this? I am trying to navigate all of this information as well. I have most of my units owned in multiple LLCs, but I'm trying to understand A) for units owned personally, can you apply at all and B) if you have multiple LLCs involved and impacted, can the loan and grant be made for each one separately? I think for most of us on BP this seems to be the better choice vs going through the PPP program.
1 Reply
Jason Bilbrey
Investor · Stevens Point, WI · Member since 2018 · 88 posts · 25 votes
6y
I have heard from others who indicated that because sole proprietorships are listed as an option you can list yourself as the business and trade name for those properties in your personal name.
2 Reply
Patti Thurman
Investor · Clayton, OH · Member since 2015 · 7 posts · 0 votes
6y
anybody know what number goes in the cost of goods sold
0 Reply
Vinay Singh
Member since 2020 · 2 posts · 0 votes
6y
Did anyone figure out the Cost of Goods sold item? I own rental properties and don't flip.
0 Reply
Alan Bosca
Member since 2018 · 45 posts · 0 votes
6y
Originally posted by @Vinay Singh:
Did anyone figure out the Cost of Goods sold item? I own rental properties and don't flip.

Cost of goods is your rent & repair, etc expenses.

0 Reply
Ken Jernigan
Wilmington, NC · Member since 2017 · 132 posts · 70 votes
6y
@James Sigsbee EIDL's are tied to EIN or SSN so you can make one app per tax number. Proceeds can be used not only for mortgage payments, but other operating expenses as well. Just no debt re-fi or fixed asset purchases. Good idea to keep EIDL money in a separate account and document expenses in case you need to show someone. You are right the EIDL is probably better as the PPP has to flow through a bank or other SBA approved lender. From what I hear, banks are favoring their best customers, those with good deposit balances and significant loans. Keep in mind terms could change. SBA made a couple of significant changes Thursday night.
1 Reply
Mark Whittlesey
Real Estate Investor · Encinitas, CA · Member since 2013 · 225 posts · 91 votes
6y
Im guessing the answer is going to be no... But does anyone have any idea what the time frame for these loans would be (even a guess on units.. such as days, weeks, months) would be ok.
Also, if we need to amend our application, is that at all possible?
TIA
0 Reply
THU NGUYEN
Investor · Sugar Land, TX · Member since 2016 · 109 posts · 46 votes
6y
Anybody knows if we can attach the following when you filled out the form online? I didn't see any place to ask for attachment. Just basic information asked, gross rev, loss rent, operating cost, and owner info from the website, then submit.
Are we waiting to hear back from SBA before we submit below forms? TIA.
Anyone has done it and got response back yet?
--------

Basic Filing Requirements

Completed SBA loan application (SBA Form 5).
• Tax Information Authorization (IRS Form 4506T)
for the applicant, principals and affiliates.
• Complete copies of the most recent Federal Income Tax Return.
• Schedule of Liabilities (SBA Form 2202).
• Personal Financial Statement (SBA Form 413).
Other Information may also be requested.

0 Reply
Brodie Hinkle
Member since 2018 · 10 posts · 0 votes
6y
@Account Closed do we know if the loan can be used to refinance existing debt?
0 Reply
Carrie Wilson
Member since 2020 · 4 posts · 0 votes
6y
If we do not know yet the impact of the disaster, do we just enter $0 for the question - 'Rental Properties (Residential and Commercial) Only - Lost Rents Due to the Disaster'? Thanks.
0 Reply
Andrey Y.
Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes
6y
Originally posted by @Alan Bosca:
Originally posted by @Vinay Singh:
Did anyone figure out the Cost of Goods sold item? I own rental properties and don't flip.

Cost of goods is your rent & repair, etc expenses.

No they aren't. Those are called "revenue" or "expenses".
From this article:

https://www.investopedia.com/terms/c/cogs.asp
Operating Expenses vs. COGS

Both operating expenses and cost of goods sold (COGS) are expenditures that companies incur with running their business. However, the expenses are segregated on the income statement. Unlike COGS, operating expenses (OPEX) are expenditures that are not directly tied to the production of goods or services. Typically, SG&A (selling, general, and administrative expenses) are included under operating expenses as a separate line item. SG&A expenses are expenditures that are not directly tied to a product such as overhead costs. Examples of operating expenses include the following:
- Rent
- Utilities
- Office supplies
- Legal costs
- Sales and marketing
- Payroll
- Insurance costs
Read the above carefully.
COGS or COG for the overwheming majority of landlords is $0. Some cases where you have a Corp. and employees you can have some COG.
This is going by the actual definition. If you want to randomly write that your Operating Expenses are "Cost of Goods", you would be wrong and falsifying data. You are free to do so if you want.
-Andrey
1 Reply
Juan Ayala
Rental Property Investor · Albuquerque, NM · Member since 2014 · 92 posts · 19 votes
6y
I just applied now and got the confirmation. Waiting on them to reach out. Anyone already had the SBA reach out and or received the funds?

Originally posted by @THU NGUYEN:
Anybody knows if we can attach the following when you filled out the form online? I didn't see any place to ask for attachment. Just basic information asked, gross rev, loss rent, operating cost, and owner info from the website, then submit.
Are we waiting to hear back from SBA before we submit below forms? TIA.
Anyone has done it and got response back yet?
--------

Basic Filing Requirements

Completed SBA loan application (SBA Form 5).
• Tax Information Authorization (IRS Form 4506T)
for the applicant, principals and affiliates.
• Complete copies of the most recent Federal Income Tax Return.
• Schedule of Liabilities (SBA Form 2202).
• Personal Financial Statement (SBA Form 413).
Other Information may also be requested.

0 Reply
Nick Rutkowski
Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
6y
@THU NGUYEN
You can google a PDF version of these forms and print them off.
0 Reply
Carrie Wilson
Member since 2020 · 4 posts · 0 votes
6y
If we do not know yet the impact of the disaster, do we just enter $0 for the question - 'Rental Properties (Residential and Commercial) Only - Lost Rents Due to the Disaster'? Thanks.
0 Reply
Carrie Wilson
Member since 2020 · 4 posts · 0 votes
6y
Originally posted by @Ken Jernigan:
@James Sigsbee EIDL's are tied to EIN or SSN so you can make one app per tax number. Proceeds can be used not only for mortgage payments, but other operating expenses as well. Just no debt re-fi or fixed asset purchases. Good idea to keep EIDL money in a separate account and document expenses in case you need to show someone. You are right the EIDL is probably better as the PPP has to flow through a bank or other SBA approved lender. From what I hear, banks are favoring their best customers, those with good deposit balances and significant loans. Keep in mind terms could change. SBA made a couple of significant changes Thursday night.

- I have some properties under my name as sole proprietorship, one under a single member LLC (disregarded entities in Pa) and I am separately an independent contractor (real estate agent since I retired last year). Any advise on how to file for EIDL? I will most likely be impacted on rental income on all properties and commissions. Thank you.

0 Reply
Ken Jernigan
Wilmington, NC · Member since 2017 · 132 posts · 70 votes
6y
@Carrie Wilson EIDL's track EIN or SSN. One app per number, so you can apply as many times as you can show an EIN or SSN. I'm hearing SBA is prioritizing $10K advance for companies with 10 employees or more. Has anyone else heard this?
0 Reply
Natalie KolodijBusiness Member
Moderator
Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
6y
A few quick notes....
You shouldn't be putting any thing for COGS- rentals don't have this. This only applies to businesses with inventories.
The applications ask for lost rents- that's what relates to you.
Also worth noting- no one has received this loan advance/grant yet. Contacts at the SBA are saying 2-3 more weeks.
Also worth noting there's no guarantee you'll receive $10k as a non -repayment grant. The wording in the act notes the advance is "Up to $10,000". It is totally up to the bank how much they approve.
Podcast Guest on Show Pay Less Tax to the IRS This Year With THESE Real Estate Tax Strategies
Kolodij Tax & Consulting
Website View Page
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