MWPXYZ wrote:If you are concerned with forgiveness, it seems that the contractor would have to pay those employees to obtain the credit, as well as some rent, utility, and interest expense. So, as long as the contractor pays the employees for not working for 8 weeks, which is the intent of the law, the loan would be forgiven. Tax free. Perhaps the expenses are deductible.
With that number of employees the contractor will have to personally guarantee the loan since the loan amount would exceed $200,000.
The retention credit act gives you a mere $5,000 credit per employee.
JR1 wrote:It looks like the EID loan is NOT the way to go. The Paycheck Protection is the one they'll want.
If I have applied for, or received an Economic Injury Disaster Loan (EIDL) related to COVID-19 before the Paycheck Protection Program became available, will I be able to refinance into a PPP loan?
Yes. If you received an EIDL loan related to COVID-19 between January 31, 2020 and the date at which the PPP becomes available, you would be able to refinance the EIDL into the PPP for loan forgiveness purposes. However, you may not take out an EIDL and a PPP for the same purposes. Remaining portions of the EIDL, for purposes other than those laid out in loan forgiveness terms for a PPP loan, would remain a loan. If you took advantage of an emergency EIDL grant award of up to $10,000, that amount would be subtracted from the amount forgiven under PPP.
Based on this, I think we should tell our clients to apply for the EIDL loan now. Get the $10K grant. Then refinance into the PPP loan later, if applicable.
Jeff-Ohio wrote:Based on this, I think we should tell our clients to apply for the EIDL loan now. Get the $10K grant. Then refinance into the PPP loan later, if applicable.
I hesitate to completely agree with that…
Thanks MWP! Good to know we only have these 7 questions to consider as we move through the decision tree.
MWPXYZ wrote:Every client will be different. some already are really different.
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