Weekly Update – WV District Office
Is rent paid to related parties eligible for loan forgiveness?
Sort of. The answer is YES as long as (1) the amount of loan forgiveness requested for rent or lease payments to a related party is no more than the amount of mortgage interest owed on the property during the Covered Period that is attributable to the space
being rented by the business, and (2) the lease and the mortgage were entered into prior to February 15, 2020.
Click here to read more.
What happens if in doing the PPP calculation, your business was approved for an amount for payroll that included the expenses paid to 1099 workers?
Funds paid to 1099 workers are NOT eligible for forgiveness. However, the business can receive partial forgiveness based on actual employee payroll expenses. Any portion of the PPP loan not forgiven will turn into a 1 percent loan for two or five years depending
on the loan note.
The U.S. Small Business Administration (SBA) Administrator Isabella Casillas Guzman announced major enhancements to the COVID Economic Injury Disaster Loan (EIDL) program, a federal disaster relief loan designed to better serve and support our small business
communities still reeling from the pandemic, especially hard-hit sectors such as restaurants, gyms, and hotels. The SBA is ready to receive new applications immediately from small businesses looking to take advantage of these new policy changes.
Key changes being announced by the SBA include:
-
Increasing the COVID EIDL Cap. The SBA will lift the COVID EIDL cap from $500,000 to $2 million. Loan funds can be used for any normal operating expenses and working capital, including payroll, purchasing equipment, and paying debt.
-
Implementation of a Deferred Payment Period. The SBA will ensure small business owners will not have to begin COVID EIDL repayment until two years after loan origination so that they can get through the pandemic without having to worry about
making ends meet.
-
Establishment of a 30-Day Exclusivity Window. To ensure Main Street businesses have additional time to access these funds, the SBA will implement a 30-day exclusivity window of approving and disbursing funds for loans of $500,000 or less. Approval
and disbursement of loans over $500,000 will begin after the 30-day period.
-
Expansion of Eligible Use of Funds. COVID EIDL funds will now be eligible to prepay commercial debt and make payments on federal business debt.
-
Simplification of affiliation requirements. To ease the COVID EIDL application process for small businesses, the SBA has established more simplified affiliation requirements to model those of the Restaurant Revitalization Fund.
The enhancements to the COVID EIDL program will allow more businesses greater and more flexible support from the over $150 billion in available COVID EIDL funds. Additionally, these changes will help entrepreneurs access capital at a time when, according to
a recent Goldman Sachs 10,000 Small Businesses survey, 44 percent of small business owners report having less than three months of cash reserves, and only 31 percent reporting confidence in gaining access to funding.
Register now to join us for the U.S. Small Business Administration’s National
Small Business Week Virtual Summit event.
This annual event, happening September 13-15, 2021, honors the nation’s 31 million small businesses for their perseverance, ingenuity, triumphs, and creativity.
All HUBZone maps are frozen through June 30, 2023. This includes Grant, Hardy, Pocahontas and the other 16 designated counties in WV.
Click below to view all HUBZone areas.
The U.S. Small Business Administration’s West Virginia District Office presents a virtual “Boots to Business Reboot” Entrepreneurship Training Program for veterans of all eras, National Guard and Reserve, and military spouses. The two-day virtual workshop will
be held the mornings of September 16 and 17.
|
