All Forum Posts by: David H.

@Jay Bob

Hi Jay, I can’t say for certain. If you are organized file taxes as a business or sole prop then yes. If you just file under your schedule e as passive income then I’m not certain. I’d reach out to your local SBDC (small business development center) for guidance or attend one of the webinars the SBA is hosting (google search SBA EIDL webinar)

If I was in your situation I would explore getting a mortgage deferral. Many banks are willing to do this at this time. Just make sure that if you do a deferral that they do not make a balloon payment at the end of the deferment period.

@Rajesh M.

Hi Rajesh, it is my understanding that sole props must use Form 5c

That being said, if you are not organized as a sole prop and just report the income on your schedule e, not schedule c, there could be complications. For example, I have 2 duplex’s but just report the income on a sch. E, therefore I personally don’t believe I am eligible, tho I’m not 100% sure, I wish I knew for certain.

I suggest reaching out to your local SBDC (small business development center) or hop on an SBA webinar (google search EIDL webinars) and ask your question at the end of the call, it’s probably the fastest way to talk to a living person at the SBA.

Hopefully that helps!

@Calvin T.

Hi Calvin,

I know the grant is forgivable for two reasons..

1. I read the CARES Act, page 67-68 spells this out

2. The nature of a grant is you don’t have to pay it back, otherwise it would be a loan

The reason I know that only 1 million business will get $10,000 is because the CARES act specifically allocated $10 billion dollars to this grant. $10 billion divided by $10,000 = 1 million businesses

Hopefully that helps

Originally posted by @Taylor Chiu:

@David H. Great info! Where can we go to find out when the 10k advance goes live? I guess news outlets might post it if the SBA gives advance notice. But if there isn't advance notice, I'm guessing the SBA site / webinars would be the best place to look?

 I would keep checking back into the SBA EIDL website daily at this point. It will unlikely be announced on the news. 

Originally posted by @Calvin Thomas:

It might help if people knew what the 10k grant is called and what is needed in order to quality for it. 

Hi Calvin,

The grant is called the "Emergency EIDL Grant". To get the grant you only need to be eligible for the EIDL Loan and to have made application for the EIDL loan.

The grant is referred to as an "advance" that must be requested at time of application. It is currently not live, as it was just put into law on Friday night. They expect to have it live on the website this week.

Essentially, to qualify you must have a business that has been affected by the disaster, which at this point is everyone.

Originally posted by @Travis C.:

Wonder how this works hypothetically speaking -

1. Mom and pop landlord has a mortgage at 75% LTV and they hold title under their own name.

2. Mortgage balance is in fact $75K and the property is worth $100k. 

***Are we saying the SBA will directly lend $25K, since that is the equity position they can collateralize, at 30 years fixed for "working capital" purposes?

****If yes, does working capital qualify as money the landlord can use for further property acquisition or could only be used to continue to cover rent loses on collateralized property as part of the loan (to to pay taxes and insurance and the mortgage or something)? 

Trying to get a read on how this works....thanks!!

Interesting topic. 

Hi Travis,

I don't believe they will be calculating the loan amount based on equity position for landlords. I believe they will be calculating loan amount in one of two ways:

First (for the majority of Small Business): 2018/2019 Gross Revenues - COGS = Gross Profit / 2 = Loan Amount

Second (likely for Landlords): Actual or Projected rental loss due to disaster + any liabilities such as mortgage + fixed debt payments etc.

This is my expectation.

You cannot use the funds for business expansion. Only for working capital such as paying fixed debt

Originally posted by @Travis C.:

Wonder how this works hypothetically speaking -

1. Mom and pop landlord has a mortgage at 75% LTV and they hold title under their own name.

2. Mortgage balance is in fact $75K and the property is worth $100k. 

***Are we saying the SBA will directly lend $25K, since that is the equity position they can collateralize, at 30 years fixed for "working capital" purposes?

****If yes, does working capital qualify as money the landlord can use for further property acquisition or could only be used to continue to cover rent loses on collateralized property as part of the loan (to to pay taxes and insurance and the mortgage or something)? 

Trying to get a read on how this works....thanks!!

Interesting topic. 

Originally posted by @James Edwards:

Is the grant $10k per person/ss #, or per business? 

My thoughts are it is per person. I can't say for certain. It will be challenging for the SBA to work this out. The SBA is notoriously strict on "affiliation", which to the SBA is broad and roomy. I would expect to only receive a grant once, however I could be wrong.

Can you get in line for the 10k advance grant right now, or is it better to wait until that goes live to apply? In other words, will people who apply after it goes live be first in line, or people who applied for the EIDL a week or two ago?

Hi Taylor,

There is no way to be certain about this. My advice would be to wait to apply until its live sometime this week. That being said, the website clearly indicates now that even if you have already applied you can go back and make a request for the $10,000 grant advance.

They have stated that the advances must be distributed in 3 days from application for advance. So it shouldn't matter what place in line you are for this grant. This could change with volume, but lets hope they stick to it.

Originally posted by @Dennis Haefner:

When filing out the form for EIDL for multiple properties, do you do a complete form for each property or just a certain section or what do you suggest?

I suggest filling out the form for a single LLC or "business entity". There should be a section to add affiliate data but I could be wrong.

Also, please visit: https://www.eventbrite.com/e/webinar-applying-for-sba-disaster-loans-economic-injury-disaster-loans-tickets-101237229278?utm_medium=email&utm_source=govdelivery

These webinars are hosted by the SBA for free. There should be webinars in all 50 states everyday by now. At the end of the webinars you are able to ask questions. It would be the fastest best way to get answers to questions that are more nuanced.