How is Everyone's Luck with EIDL, PPP, Unemployment?

[TomCopeland]

PPP and PUA

If I'm getting the PPP I'm not eligible for PUA, correct? I've already applied for PUA, so if approved I assume there's a way to decline it?

Getting the PPP may or may not make you ineligible for unemployment benefits. Each state is different as to how much you can earn and still be eligible for unemployment. You can always stop filing weekly unemployment benefits if you would be better off with the PPP money.

[nanglgrl]

I would like to know the answer to this question as well. I received the PPP in the first round about 6 weeks ago, received the EIDL about a week ago and then received the grant attached to the EIDL a few days ago.

I applied for the EIDL on March 22nd using the long form and then reapplied using the website on April 2nd. I applied for the PPP around 4/5 when they opened up to small businesses but it didn’t start processing until they opened it to sole props.

It’s a lot of money however, when you look at my losses so far and the losses I will experience throughout this year I imagine I will come out even.

Unfortunately I don’t think my PPP will be forgiven at all due to how the bank calculated the amount and, as a sole proprietor, how they determine the pay for forgiveness. Basically, I had the right number on my forms, the bank looked at my taxes and used my self employment income and the small income I received from a second job instead of the slightly lower amount on my schedule C. Since they use the amount from the schedule C for forgiveness and haven’t allowed sole props to pay ourselves more (I’m working longer hours so I should be able to but no) it will be impossible for me to say 75% went to my payroll. When I saw what was approved I thought I had done it wrong (I trusted the professional), when I discovered how they had come to the wrong amount I emailed them to figure out options but haven’t heard back.

Update.

We received $2,000 EIDL Grant.
We received $24,600 EIDL loan.

We received the EIDL loan after the PPP loan. Not sure if we can roll it in to the PPP now. Anyone attempt this?

We will be using ALL funds towards payroll. It will pay payroll for the next year or so. We will use income from the business for all other expenses.

Kind of wish we didn't get the EIDL grant because it just subtracts from PPP forgiveness. Seems banks want to just get the whole PPP forgiven and off their books.

[TomCopeland]

Ppp

I would like to know the answer to this question as well. I received the PPP in the first round about 6 weeks ago, received the EIDL about a week ago and then received the grant attached to the EIDL a few days ago.

I applied for the EIDL on March 22nd using the long form and then reapplied using the website on April 2nd. I applied for the PPP around 4/5 when they opened up to small businesses but it didn’t start processing until they opened it to sole props.

It’s a lot of money however, when you look at my losses so far and the losses I will experience throughout this year I imagine I will come out even.

Unfortunately I don’t think my PPP will be forgiven at all due to how the bank calculated the amount and, as a sole proprietor, how they determine the pay for forgiveness. Basically, I had the right number on my forms, the bank looked at my taxes and used my self employment income and the small income I received from a second job instead of the slightly lower amount on my schedule C. Since they use the amount from the schedule C for forgiveness and haven’t allowed sole props to pay ourselves more (I’m working longer hours so I should be able to but no) it will be impossible for me to say 75% went to my payroll. When I saw what was approved I thought I had done it wrong (I trusted the professional), when I discovered how they had come to the wrong amount I emailed them to figure out options but haven’t heard back.

I'm not aware of any SBA rule that says you can't spend more on payroll for yourself than indicated by your Schedule C. The total they used from Schedule C determined how much you can get from the PPP. It doesn't limit how much you can use for payroll on yourself. Ask the bank for a rule that says you are limited on how much you can pay yourself.

[nanglgrl]

I'm not aware of any SBA rule that says you can't spend more on payroll for yourself than indicated by your Schedule C. The total they used from Schedule C determined how much you can get from the PPP. It doesn't limit how much you can use for payroll on yourself. Ask the bank for a rule that says you are limited on how much you can pay yourself.

I got this information from articles explaining the final interim rules for forgiveness: The amount of loan forgiveness requested for owner-employees and self-employed individuals’ payroll compensation can be no more than the lesser of 8/52 of 2019 compensation (i.e., approximately 15.38 percent of 2019 compensation) or $15,385 per individual in total across all businesses. See 85 FR 21747, 21750. Schedule C filers are capped by the amount of their owner compensation replacement, calculated based on 2019 net profit.

Please tell me it’s wrong!

[TomCopeland]

Ppp

I got this information from articles explaining the final interim rules for forgiveness: The amount of loan forgiveness requested for owner-employees and self-employed individuals’ payroll compensation can be no more than the lesser of 8/52 of 2019 compensation (i.e., approximately 15.38 percent of 2019 compensation) or $15,385 per individual in total across all businesses. See 85 FR 21747, 21750. Schedule C filers are capped by the amount of their owner compensation replacement, calculated based on 2019 net profit.

Please tell me it’s wrong!

It is not wrong. So, if your 2019 Schedule C profit was $50,000, the maximum amount you can receive from PPP is $10,416 ($50,000 divided by 12, then multiplied by 2.5). Of that, 75% must be used for your own payroll, or $7,812, well under the $15,385 limit. You would have to have a 2019 profit of almost $100,000 before you would exceed the $15,385 limit, so this isn't an issue for most providers.

[AmyKidsCo]

Tom, where do the rules say that you can't use more than 75% for payroll? I've seen several places where it says you must use at least 75%, but not that you can't use more than 75%. My lender told me I could use 100% for payroll. They also told me that they'd be contacting me 6-8 after I received it so I should try to distribute it in 6 weeks.

[MyAngels]

Tom, where do the rules say that you can't use more than 75% for payroll? I've seen several places where it says you must use at least 75%, but not that you can't use more than 75%. My lender told me I could use 100% for payroll. They also told me that they'd be contacting me 6-8 after I received it so I should try to distribute it in 6 weeks.

They have a special rule for self-employed individuals that caps the amount that can be used as payroll at 8/52 of the net profit amount of your 2019 schedule C. You can read it in their newest "Interim Rule" here (page 11): https://home.treasury.gov/system/fil..._QFPBVlKARj4mw

I have also heard some people say that banks will have some latitude in the forgiveness decisions, so if your bank is telling you something different you should document that in case there is an issue when it comes time to get this forgiven

[AmyKidsCo]

Thanks MyAngels. Now I wish I remembered who I spoke to at our bank.