Millions of businesses have received crucial funding through Covid relief loan programs, including the Economic Injury Disaster Loans and Paycheck Protection Plan loans. With hundreds of pages of guidance on these grants and loans, it is no wonder that many business owners are confused.
We have answered hundreds of questions regarding the EIDL and Paycheck Protect Program . These questions can be answered easily, such as:
Can I get a loan for a PPP if I’m an independent contractor?
Answer: You can calculate your tax based on the income you report on Schedule C.
“How do I apply for a targeted EIDL grant?”
Answer: You have to wait until the SBA emails you an invitation to apply. Only if you have applied for an EIDL in 2020 will you receive an invitation.
Some can be much more complex, like this one that we received recently on our blog.
“I am the 100% owner of a S Corporation, and I receive a salary.” I’m trying to apply to the second PPP loan but the bank wants to see my Q1 2020 form 941, which shows the number of employees I have and if I run a business. I had a business in 2020 but didn’t receive a pay check for Q1 2020. I therefore reported a 0 on the Form 941. Will this zero return disqualify my application for the second PPP round, since there was no pay for January-March of 2020 but I used my 2019 numbers? I did not reach the 25 %.” requirement in my gross sales.
Note: We do not have all the answers. We encouraged our readers to look at the following options for that question. Here are five resources to help you with your EIDL or PPP questions: TWEET
1. Your Lender
You should ask your lender specific questions regarding your PPP loan. Most lenders deal with a large volume of loans and some are more responsive than others to borrower’s questions.
Even if the request for additional information seems redundant, try to be patient. They are also dealing with the changing guidelines. It is ultimately your lender’s responsibility to guide you through the application process.
Small Business Administration (SBA), which provides these grants and loans, should be contacted if you have questions about an EIDL application or Targeted EIDL Advanced.
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- Contact the SBA by calling 800-659-2955.
- Email questions about EIDL: disastercustomerservice@sba.gov; email questions about the Targeted EIDL Advance: TargetedAdvance@sba.gov.
2. Your Local SBA Office
SBA offices are located across the nation. Many of these offices have held events to help answer questions from small business owners about Covid loans, as well as other relief programs. If you have questions about PPP or EIDL, these offices are a great source of information. Find the SBA office nearest you.
3. SBA Resource Partners
You can use taxpayer dollars to fund programs that are useful in navigating the economic crisis. SBA’s resource partners include
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- Small Business Development Centers
- SCORE (volunteer mentors)
- Women’s Business Centers
- Veterans Business Outreach Centers (VBOCs)
These organizations and their members have been working tirelessly for the last year to assist small business owners in taking advantage of federal relief program. They may also be able direct you to local or state grants and assistance programs. Find local SBA resources here.
4. Your accountant
Accounting professionals are crucial for a number of reasons to help you obtain a Covid-relief grant or loan:
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- You should complete your tax returns before applying for a PPP or EIDL.
- You may be unable to calculate certain calculations in your application (e.g., reductions in revenue).
- Even the most detail-oriented entrepreneurs can find it difficult to apply for PPP forgiveness. You can ask your bookkeeper or accountant for help or they may refer you to someone else who can. Accounting professionals may have software that calculates forgiveness.
Be patient and understanding with your requests. Bookkeepers and accountants are already very busy this year. If you organize your financial data, they can help you better.
5. Other business owners
Nav launched a Facebook group shortly after the CARES Act was passed in March 2020. The group allows business owners to share their experiences and ask questions about EIDL and PPP. It was a huge success. Business Loan & Finance Insight Hub – PPP, EIDL, and More has now nearly 20,000 Facebook members. Many of them share their experiences.
You should be careful when taking advice from Facebook posts, but many business owners find it helpful to hear from other members about their success in obtaining funding through these stimulus programmes.