FAQ

Explore a list of frequently asked questions.

What are the Coronavirus Relief Options available through the SBA?

Economic Injury Disaster Loan (EIDL) 

Paycheck Protection Program  

SBA Express Bridge Loans  

Are EIDL applications still being accepted?

EIDL is currently not taking any more applications. 

I applied to EIDL a few weeks back, where is my application?

We have seen people wait up to 4 weeks from application date but you can check the Disaster Loan Assistance Tracker 

Are you eligible for any of the program (PPP, EIDL, etc.) if you are structured as a C-Corp with less than 500 employees?

Businesses with 500 employees or less all qualify for PPP 

Also based on industry, double check with SBA size standards to see if you qualify as a small business 

I run a small nonprofit the sample EIDL form asked for % of ownership, but technically no one is an "owner". Do I fill it out as if I am the 100% owner, as President & CEO?

0% owner 

Can I apply for EIDL and PPP?

Yes, you can get both loans, but the key is to use the money to cover different expenses. Section 1102(a)(2)(G), the section outlining the PPP loans, explains the borrower requirements. It says the borrower has to certify that “the eligible recipient has not received amounts under this subsection for the same purpose and duplicative amounts.” 

As a reminder, EIDLs can be used to cover: 

  • Paid sick leave to employees unable to work due to the direct effect of COVID-19. 
  • Maintain payroll 
  • Increased costs due to supply chain disruption 
  • Rent or mortgage payments  
  • Repaying obligations that cannot be met due to revenue loss  

PPP loan funds can be used to cover 

  • Payroll costs 
  • Group health care benefits during periods of paid, sick, medical, or family leave, and insurance premiums.  
  • Interest on a mortgage obligation  
  • Rent, under lease agreements in force before February 15, 2020  
  • Utilities, for which service began before February 15, 2020  
  • Interest on any debt incurred before February 15, 2020 
What is PPP?

The Paycheck Protection Program (“PPP”) authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. All loan terms will be the same for everyone.  

The loan amounts will be forgiven as long as:   

  • The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made; and  
  • Employee and compensation levels are maintained. Payroll costs are capped at $100,000 on an annualized basis for each employee. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs. Loan payments will be deferred for 6 months. 

Considering the Paycheck Protection program, what kind of documentation should we provide?  Also, what does the approval process look like from a lender standpoint? 

Each lender has its own criteria for approval. 

What are PPP criteria for CORPORATIONS?

2019 payroll summary including wages and state taxes paid (include 2019 and 2020 separately) Q1 2020 payroll summary including wages and state taxes paid  

2019/2020 Group Health benefits paid by the company  

2019/2020 Retirement benefits paid by the company  

2019/2020 IRS form 940 and IRS form 941 (include 2019 and 2020 separately) 

Articles of Incorporation (S or C Corp)  

Articles of Organization (LLC/LLP) Fictitious Business Name, and Partnership Agreement (Partnership) Fictitious Business Name (Sole Prop) 

SBA Form 2483 Addendum A & B if needed  

Additional Owners over 20% if needed  

2019 Business Tax Return (OR) 2018 Business Tax Return & 2019 FYE Financial Statement 

Photo ID of Authorized Representative on PPP Application 

What are PPP criteria for SOLE PROPRIETORS?

NO EMPLOYEES  

2019 1040 with Schedule C (If 2019 not filed, please fill out and submit a draft)  

1099-MISC detailing non-employee compensation received (box7) OR invoices, OR bank statements, OR book of record that establishes you are self-employed.  

2020 invoice, bank statement or book of record to establish you were in operation on or around 2-15-20 

WITH EMPLOYEES  

2019 1040 with Schedule C (If 2019 not filed, please fill out and submit a draft)  

Form 941 (or other tax form or equivalent payroll processor records containing similar information as Form 941)  

State Quarterly wage unemployment insurance tax reporting forms from Each quarter in 2019 (or Equivalent payroll processor records)  

Documentation supporting retirement  

Payroll statement or similar documentation from the pay period that covered 2-15-20 

Fictitious Business Name (if applicable) 

SBA Loan Application 

Photo ID of Authorized Representative on PPP Application 

Who is still taking PPP Applications?

You can check the following sites:  

Active PPP Lenders Tracker  

Venturize Lender List 

Lendistry  

CDC Small Business Finance  

Can a 501c3 organization be eligible for the PPP if they are technically employees of a 501c6 and their payroll shows up on their financials?

Likely yes, as long as you can generate payroll reports that include only your own employees. If your payroll reports (forms 940, 941, etc.) include the entire 501c6, you might have to apply with the larger organization. 

Are 501c6 business improvement districts eligible for PPP?

501(c)6s are not eligible.

Are banks only offering the loan process to existing customers?

The SBA just widened the requirements so more banks can participate including community banks.  However, every lender has their own criteria, so the recommendation is to go to your existing banker first where you already have a banking relationship. 

If we receive the PPP loan, can we use it to pay for PT hours while we are closed or do we have to bring everyone back at FT pay?

You would estimate your average payroll from 2019. The forgivable part will be calculated after the 8-week period after you get the funding. If your payroll is less, then part of the forgiveness will be equivalent 

How do we prove payroll if we're a pass-through entity?

Use the net profit from your 2019 tax returns. 

Does PPP only cover past employees? Can it be applied to managers that were unpaid before but will be the only ones working once we reopen.

Only employees that appear in your payroll reports prior to 2/15/20. 

I am also a sole proprietor for a business. Am I eligible for the PPP if I did not make any payroll in the past year?

Yes, you qualify as long as you can prove the amount were withdrawing from the businesses.  

Most recent 12 months of payroll (Feb '19 - Feb '20) is significantly higher than 2019's (Jan '19 - Dec '19). Can we use the most recent average in the PPP application?

You can only calculate using the periods below. Use the highest number. 

1/1/19 to 12/31/19 and divide by 12 

2/15/19 to 6/30/19 and divide by 5 

1/1/20 to 2/29/20 and divide by 2 

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When does the 8-week period for PPP start?

Upon receipt of funds. 

If I have employees who are paid over $100K are we only loaned up to $100K or are these employees excluded all together?

Your loan will be up to $100k.  You include the employees who are paid over $100k, however, they are only covered up to the $100k for the loan. 

Should a nonprofit apply to PPP to continue paying their independent contractors or should the contractors apply on their own to pay themselves

Contractors need to apply on their own 

Do you need to be a US citizen or resident to qualify for the PPP loan?

You need to be a US citizen or resident to qualify for the loans. 

If I pay a separate policy for health insurance for my employee and it is not included in my payroll, are those premiums covered / included/ refunded in the PPT program?

Yes.  Your bank will likely ask for copies of your invoices, have them ready. 

Should companies be paying broker fees if they get assistance in applying for the PPP loan?

Broker fees can be collected and will be paid out by the lending institution which is ultimately paid out by the SBA – please do not pay any brokers! 

While PPP does allow for brokers to be paid fees to process loans, those fees are paid out by the intermediaries and should not be charged to the business owner.

Agent fee structure: One (1) percent for loans of not more than $350,000; 0.50 percent for loans of more than $350,000 and less than $2 million; and 0.25 percent for loans of at least $2 million.

What is the difference between laying off an employee and furlough?

Laying off your employee is a final act, meaning you are closing the books for their employment file because you have no immediate plan of bringing them back to work.  You will have to provide a final payment for all hours worked and payment for any vacation accrued on their final day of work.  If you were to want to bring that laid off employee back to work, you would have to re-hire and onboard them. 

Furloughs are a temporary loss of work; you leave your employees on the books, and they are taking un-paid time off. They will continue to be eligible for any benefits you provide, i.e. health insurance.   Furloughing can be for a week or more.   

Can an employee file for unemployment and the Payroll Protection program if their wages have been reduced?

If you lower an employee’s wages or hours by 25% or more, they may be eligible for unemployment. 

The California EDD (Employment Development Department) requires the following to be met by the employee in order to apply for unemployment.  

  • Totally or partially unemployed. 
  • Unemployed through no fault of your own. 
  • Physically able to work. 
  • Available for work. 
  • Ready and willing to accept work immediately. 

Please note that it is NOT up to the employer to tell an employee whether or not they are eligible for unemployment insurance.  Any employee who you change their work status for must receive these two items.  

We are a small cafe business with only two employees, are we too small for benefits?

No, you can apply for the EIDL and PPP 

I own a single-member LLC that acts as a pass through for tax / IRS purposes. Which SBA loan program would be best for those of us who own such an entity?

You are eligible for both EIDL and PPP 

Does it matter if a small business is profitable to receive the loans? We are only just over a year old with only two employees.

You are still eligible for EIDL and PPP. 

The City of Long Beach requires not to have financial loss 

What does the Care Act provide for individuals that have existing SBA Loans?

Deferral of payments for six months, currently active. 

What is the definition of “employee” - W2? 1099?

An employee W2 is the tax form that employers are required to give all employees annually.  For 2019, you should have sent each employee a w2 postmarked by January 31, 2020.  A W2 includes an employee’s total pay, the amount of taxes that were withheld and any withdrawals made toward employee’s benefits.  

A W3 is a summary of all of your employees who received a W2. 

How do you defer the federal payroll taxes – through your payroll company?
  • If you have a payroll company to process your payroll, they will be able to assist you in deferring your payroll taxes.   
  • If you process payroll yourself, you would be able to defer your federal payroll taxes.  Always consult with your Tax Consultant. 
What options do startups have, that just started in Feb 2020 with only 1 or 2 employees that started in Feb then was shut down in March? Cannot show payroll from 2019?

Have to be in business by 2/15.  Banks requiring payroll history so don’t know if PPP will work for you 

You can still apply for the EIDL even if the PPP doesn’t work 

What is PUA? PANDEMIC UNEMPLOYMENT ASSISTANCE (PUA) PROGRAM

This is a newly available emergency unemployment assistance program under the federal CARES Act.  PUA provides assistance for unemployed or partially unemployed individuals who are not eligible for regular unemployment insurance and who are unable or unavailable to work due to COVID-19 related circumstances.  

The Employment Development Department (EDD) will be accepting on-line applications for this program beginning on Tuesday, April 28.   

For more information Check the OFFICIAL WEBSITE 

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I’m not sure what rules and regulations I should be following for my employees, where can I get more information?

You can check the Department of Labor site for MORE INFORMATION