Bingo. And that was not unexpected. For the same amount of work, the bank gets more bang.
Can anyone explain the interaction between EIDL and PPP in terms of forgiveness? In post #55, @milee30 said that any EIDL advance had to be subtracted from a PPP loan. And I have read things online that implied that too.
What I don’t understand is why you cannot take advantage of both programs, if you use the EIDL for something other than payroll?
As an example, say I got $5000 in EIDL advance, and then was approved for $10,000 in PPP loans. Do I really only have $10,000 to “spend”? And 75% of that can only be spent on Payroll items, correct?
We have a lot of accounts payable for inventory, and I would love to use our EIDL advance for that. I know A/P is a permissible use of EIDL funds, I am just not sure why I can’t spend EIDL on A/P and PPP on payroll. Can anyone clear this up for me?
The EIDL and PPP are separate programs, so there isn’t really any interaction in terms of forgiveness. You need to follow the EIDL requirements for the money you receive under that program and the PPP requirements for the money you receive under that program.
The only “interaction” is that amounts loaned under PPP were reduced by any EIDL you received and when it comes time to substantiate what you spent, you won’t be able to double count or use the same spending to substantiate both loans (IOW< you can’t pay employees $1k and use that to get $1k forgiven from both the PPP and EIDL.)
I didn’t get an EIDL, only PPP so only have the PPP loan documents. You will need to read your own EIDL loan documents to understand what - if anything - you need to do to get the EIDL forgiven. For the PPP, it’s that you need to spend at least 75% of the loan amount on payroll and the remaining 25% on qualified mortgage, interest and/or utilities if you want the loan to be forgiven. You are welcome to spend the loan money on whatever you’d like to spend it - it just won’t be forgiven if you don’t spend it on what they require.
Thanks @milee30 I realize they are separate programs but all the info talking about “rolling EIDL into PPP” and “you can’t double dip” just is so hard for me to understand for some reason.
I absolutely get why I cannot use EIDL to pay payroll, since I am using PPP for that,
I applied for the EIDL emergency advance way before I could apply for PPP. ONe day last week, the EIDL money appeared in my bank account. I have received nothing, no loan docs, nothing about repayment or how to spend it etc.
I would love to spend it on A/P but everything I read seems to say I cannot spend it if I also get a PPP loan. We did get a PPP loan equal to 2.5 x monthly payroll. So my PPP loan amount was not reduced to my knowledge.
If you received a PPP loan for the full amount of 2.5 x average payroll and the amount of your EIDL wasn’t subtracted from that total, you’re right to be concerned. There were specific fields on the PPP loan app to fill in the amount of EIDL so that amount could be subtracted and the PPP documents all mention that you need to subtract out the EIDL amounts received. If your PPP app didn’t show those EIDL amounts, it is possible the government will seek that amount back. You should find out what your PPP application shows and make sure if the amount of the EIDL wasn’t shown or subtracted that you find out how they’ll handle this error. Could be they are so swamped they never check, could be they will forgive that sort of double counting or could be that they go after those amounts as double dipping or fraud.
Bottom line - the amount you receive for PPP plus EIDL should not be more than 2.5 times your average payroll.
We applied for the EIDL first but never got any money.
The internet–twitter, Reddit etc–makes it clear the we are not the only ones getting emails from Bank of America telling us we are missing documents. There apparently is a glitch on Bank of America’s end. I spoke to the third party where the documents are uploaded and they can see that my documents are there–why can’t Bank of America. As soon as more PPP money gets added we are going to apply through a different bank. I feel terrible for our employees that we haven’t been able to make this happen yet.
@milee30 THANK YOU for helping to clear this up. I pulled out my application and I do see the form says “Average monthly payroll x 2.5 + EIDL, Net of advance (if applicable) equals loan request.” And my loan request is what I was granted, that is a full 2.5x payroll. So the EIDL I received is on top of that.
At the time I applied for PPP, it was a couple of weeks since I’d filled out the EIDL emergency $10,000 advance request and I had heard nothing so I didn’t even think about
My banker said she did not know anything about EIDL as it was a separate program not related to PPP. And I understand that they are being thrown into the deep end with all these programs, it’s so frustrating.
I suppose I will have to show her that info on the PPP application and bring it to her attention. And probably pretend I did not receive any EIDL money at all, just plan on paying it back.
Well, hmm. $2,000 just showed up in our business account, from the EIDL program. When I filled out the PPP application, it asked if I had RECEIVED any EIDL money and and I truthfully answered no. It didn’t ask if I had APPLIED for it.
Oh, well, I won’t worry about it. I’ll use it and then pay it back if asked.
@MaineLonghorn that is exactly my thinking. I spoke on the phone to my banker and she said it was ok to have two separate loans
My CPA said we will mention it in the final 8-week report and let the feds tell me what to do.
My understanding is you can’t have both the EIDL and the PPP. .
One if the banks we deal with told us Monday early they weren’t accepting new applications for the PPP loans even with the newly approved funds. They are already over allocated $$$ with the applications they already had who missed out on the first round of $$$
Surprise! $10,000 EIDL was deposited in our company bank account yesterday. No word on PPP. We applied through a different bank since Bank of America completely ghosted us in the first go-round until the money ran out. New bank says our application went in Monday so we will see.
@swimcatsmom I have been told by several sources (SBA webinar, email from US rep etc) that you can have both an EIDL and PPP. They are 2 separate instruments for 2 separate purposes. What I was having trouble with is whether you have to fold the EIDL loan into the PPP loan.
My CPA said it’s hard to tell at this point. We will just mention the EIDL loan in our eight-week PPP report. If I need to pay back the EIDL, I will.
I apologise - I was mixing it up with something else. I should have double checked my acronyms before I responded.
NAMI Maine got PPP funds. It’s huge for them because every year they struggle to raise money for salaries and overhead. Most grants and donations come with specific requirements as to what the money can be used for. So to have 2 1/2 months of payroll covered is wonderful. They’re going to end up with a surplus this year, after many years with deficits. ?
So our eight-week spending period for the PPP funds ends June 15. Does anyone know how to start the loan forgiveness process?
@MaineLonghorn I got an email from my bank. You have to complete this crazy application (i.e. fill out schedule A so you know what to put in line 1 of form B so you can calculate the number needed for box 4. . .) https://www.sba.gov/sites/default/files/2020-05/3245-0407%20SBA%20Form%203508%20PPP%20Forgiveness%20Application.pdf
Here’s some more good info. I have found the Chambers of Commerce (local, state, national) to be good resources: https://www.uschamber.com/report/guide-ppp-loan-forgiveness
But honestly, looking at that form and trying to calculate FTE made me want to just return the money!