All Forum Posts by: Sharon Rosendahl

I just signed for a greater than 25k loan. My properties are in my name. In scrutinizing the documents I noticed a couple of things. One was that the UCC filing is on personal property. I was thinking that normally excludes real estate. When I look it up as a legal term it seems to be nearly everything except real estate.

Meaning they can take your inventory, equipment, that new forklift to replace your damaged one, accounts receivable, royalty licenses, bank accounts, financial settlements etc.

Another clause that I noticed was:

Does this mean that the collateral under e and f doesn't include non-business property? Does this mean they can lay claim to the washers, dryers, lawn mowers, vehicles and in our case tools that the business claimed on their taxes but not our personally purchased tools, cars, pots and pans?

I don't plan on defaulting so not relevant since they will never seize my stuff.

Now I just wish they would give us clearer guidance on what we are allowed to buy as inventory. I mean, my inventory is houses.

@Jonathan Paz Since I also have no guidance on what is ok I am just making a guess and telling you what I plan on doing. I got my portal email this weekend and am waiting for documents. Assuming I get the loan I have made plans for the money.

Since the only thing that seems clear is that we can use the money to pay for things we normally pay for including some pre-existing debt. I haven't seen anything that said you couldn't make a mortgage payment with it. The only thing I feel is pretty much guaranteed to fall under ok is if I have a tenant who fails to pay me rent I can use this money to replace their rent so I can pay the mortgage, utilities and at least that month's taxes and insurance. I am not sure if I can use it for those things if my tenant pays rent. 

Based upon this, I have opened a high interest, online savings and tied it to my rental unit checking. For now, the money will sit there in its own account until more guidance comes out. Meanwhile, if I need to replace rent with it I can do that. Since it is in one account it will be easier to track than if it is intermingled with my current funds.

You should be saving receipts etc regardless since if your taxes are audited you would have to produce them. I would isolate any receipts so they are easy to find. You never want to give the government more than what they ask for since something could raise further questions. 

I am hoping clearer guidance comes out as time goes by so I know what I can spend this money on. In the event I don't like what they say, I would still have the money to pay off the loan less anything that without much doubt seems to have been used appropriately.

Applied 4/2. At some point I got the $1000 advance. Just got the portal email and took the full amount. I still wish someone would tell me what is ok but assuming it all goes through, I at least don't have to panic about whether my tenants pay rent. Especially since Washington state has made even implying that non-payment could some day result in eviction is illegal.

Applied 4/2. Just got Portal email for full amount (9 months lost rent). 

I am very disappointed at the handling of all this government money related to Covid-19. Washington state has stopped paying unemployment to many people because the fraud level is so high that they are paying out an unknown amount on fake claims. Some of these people are employed, never filed etc. Some go to file and find someone has already received payments under their name and now there is a question as to who the real person is and who should be getting unemployment. So now truly unemployed people are not getting their payments. PPP was paid out to huge companies and ran out of money with so many small businesses left out in the cold. EIDL seems to be a lottery where some get loans with no proof and other don't. Your application number/date mean nothing. I have to wonder if EIDL is out of money because a bunch was paid out fraudulently. 

While I was given an advance I have still heard nothing else besides canned emails. I should be ok since I can just squeak by to pay at least the basic monthly mortgages and utilities with my personal salary if I have to. I know there are many others who depend on their rentals and other businesses as their sole income. Sadly, even that doesn't seem to come into play with the decision process. 

Strange. I got the advance a few weeks ago but still no loan offer. I didn't sign anything so I don't think they will ask for it back.

@Cameron Lam I don't think we have to pay the 1k back. In the beginning they said it was forgiven but terms are so unclear I don't know. I figure if they have an issue with how I spent it then it is small enough to just give it back. 

@Account Closed Oh my! That is really scary. I'm sure that much like the IRS there is a disclaimer in something that says any information given out over the phone doesn't matter, it is the documents that determine what you can do. It is scary that fraud investigation is more important than educating recipients to the proper use of the loan much less ensuring that applicants are actually in business and should be getting this. The reality is, my credit report isn't very indicative of my ownership of rental units since I only have 1 regular mortgage. The rest of mine are private and I don't believe they show up although I have all kinds of documentation for them. I would ask me for more proof. They haven't offered to me yet so perhaps someone is actually checking deeds?

There is a good chance that if I were free to do whatever, I would buy another unit. I am lucky to still have W2 income that fully supports us so don't need anything from my rentals and can actually partially support them if we had to.

I haven't gotten a loan offer yet but did get the credit pull and $1k in my bank. I was thinking if I'm offered over $25k to only take the $24.9 so I don't have to sign over anything as collateral. But, I'm still confused by what we can use the loan for. It seems this is the only guidance. 

Borrower will use all the proceeds of this Loan solely as working capital to alleviate economic injury caused by

disaster occurring in the month of January 31, 2020 and continuing thereafter

I gather from this phrase that we are limited to spending this money to alleviate economic injury-loss of income due to Covid-19. To me, this means that the money can only be used to cover unpaid rent. I would guess it would include units that were empty before but likely to have been rented except for Covid-19. If a tenant moves out because they can't afford the rent due to Covid-19 would repairs/cleaning be included in that since the reason they vacated was Covid-19? If everyone pays their rent and all your units are full then you can't use the money. 

I have heard people talking about buying other units with the money or doing other things but it seems that would be a violation of the loan terms. I'm even concerned about taking my reserve to buy another unit since I'd have this loan sitting there. I mean, what if I need the money to repair something but that isn't Covid-19 related? 

I feel like there has been no guidance on what is ok and what isn't. I don't want to sign away everything I own to get a little more of a loan that I can't use for anything. I am lucky, my tenants are either getting Social Security, have jobs that are classed as essential, or have jobs that are needed so much that they have been managing to work despite not actually being essential. I sort of feel like if I am offered a loan, I'll just take the $24.9 and stick it in an account in case this drags on and I start not getting rent.

@Derek Jones Thank you for posting the docs. The section that says what you can use the loan for seems to say that it can only be used for expenses caused by the disaster. To me, that means that any rent lost due to Covid-19. So if a current tenant fails to pay or a vacant unit remains vacant then the lost rent could be replaced with loan money. I would also think you could squeeze in damages caused by an inability to obtain services due to lockdowns. Our state only recently allowed non-emergency construction. I had a windstorm damage a roof which I was able to get a temporary fix but the roofer only recently was allowed to replace the roof. If it turned out that resulted in more damage I would think I could claim that as Covid-19 related since our state barred him and the city seems to be having trouble issuing permits.

While I have been sent the $1k advance and had my credit pulled I haven't gotten the portal email yet. Since so much of my state, Washington, is still shut down and no idea as to what will happen over the coming months I guess I would take the loan and just pay it back once the crisis passes since it doesn't seem I can use the money for much except to cover what my tenants don't pay.