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Discussion PPP

Mermaidman

Diamond Member
Sep 4, 2003
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Any sole proprietors here apply for the Paycheck Protection Program? And received the loan?
What I'm unsure about is the disbursement of the loan. Hypothetically, I apply for $20,000 (entirely forgivable), and the entire loan is intended to be payroll to myself as sole proprietor. Can I pay myself $20,000 all at once, or simulate a periodic paycheck (e.g. biweekly) to meet forgiveness criteria, or it doesn't matter?
 

bbhaag

Diamond Member
Jul 2, 2011
5,971
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We are not an SP but we did receive close to $70K because of the PPP. We are a duel member LLC with S-corp status. My business partner and I paid ourselves our regular bi-weekly paycheck along with the rest of our staff including a $15K bonus that we normally give ourselves in June to cover quarterly taxes for the year. Since we are an LLC with S-corp status the business income passes through to us so we are only taxed once not twice like an SP is.
 
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highland145

Lifer
Oct 12, 2009
42,320
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Ask your banker. I was told that they determine if it's forgivable, within the guidelines. And the last email I got sounded like some of the guidelines were still not set. YMMV
 

deadlyapp

Diamond Member
Apr 25, 2004
6,140
449
126
Here are the details on PPP forgiveness as a SP. Looks like you can get up to ~$20k but only based on your profits from last year per month.

Doesn't look like there is any reason you can't just put it on your books as a lump sum. It's all taxed as normal income anyways.


Also - quick note since I just was looking at it myself, if you operated with a loss (eg your Schedule C shows a negative number) then you are technically not eligible. I haven't figured out yet if there is a way around this.
 
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bbhaag

Diamond Member
Jul 2, 2011
5,971
1,325
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Pretty sure PPP loans are all taken at this point heh. Goodluck.
Yeah this is a very good point as well. If the OP hasn't already applied and had his app accepted it's most likely to late. Which might not be a bad thing. This piece of legislation was pushed through by both sides WAY to early IMO and just wasn't well thought out. The rules are changing almost weekly and business like us are in wait state regarding whether or not the loan will be truly forgivable.

Who knows maybe another package will be passed by Congress with the same good intent but a little better thought out. It would certainly help a lot of SB's that are still hurting and could use the financial help.
 
Nov 8, 2012
20,778
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Yeah this is a very good point as well. If the OP hasn't already applied and had his app accepted it's most likely to late. Which might not be a bad thing. This piece of legislation was pushed through by both sides WAY to early IMO and just wasn't well thought out. The rules are changing almost weekly and business like us are in wait state regarding whether or not the loan will be truly forgivable.

Who knows maybe another package will be passed by Congress with the same good intent but a little better thought out. It would certainly help a lot of SB's that are still hurting and could use the financial help.
Republicans just gave their legislation. It includes another stimulus check and additional funding for PPP loans.

So between the Lefty HEROES act and the Righy HEALS act they will come together - and those 2 items are something that was in both of them.

At this point just a matter of ironing out the differences and yelling at eachother for another 3 weeks.
 

Mermaidman

Diamond Member
Sep 4, 2003
7,919
32
91
Final update (or is it?) - I ended dividing the loan into monthly payments to myself, but I don't think it mattered after all. Did the same for both first draw and second draw PPP.
Both loans were forgiven.
 

highland145

Lifer
Oct 12, 2009
42,320
4,797
136
Not forgiven. "Financial institutions don't qualify." Loan sharking has moved up in the world. :rolleyes: So it got rolled over to a 24mo loan at 1%. Since it wasn't forgiven, the loan date started May 2020 when I got the funds. So I actually have an 8 month loan.
 

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