the Paycheck protection program is back and in this video I'm gonna go and
unpack and update the latest information and news about the Paycheck protection
program as well as talking about the patriot protection program that applies
to self-employed individuals and independent contractors,
Hey everyone this is Sam Kwak here one of the Kwak Brothers coming to you again with
another update on the SBA program specifically the Paycheck protection
program now before we begin the video be sure to subscribe to our channel if you
want more updates about the SBA programs as well as the Paycheck protection
program okay so just few weeks ago the Paycheck protection program did indeed
run out of money but a couple of days ago the government took action to put
additional funding through the Paycheck protection program with the additional
funding that was added to the Paycheck protection program there's also a new
guideline that was established by the SBA that addresses situations like
partnerships and starting today you can once again apply for the Paycheck
protection program if you have not already by now several hours have passed
so you don't want to miss on the opportunity if you're eligible to go and
apply for the Paycheck protection program also you may want to ask fast
because all applications are due June 30th 2020 the path may seem far away but
remember the Paycheck protection program again is limited by the funding as well
as the time limit on the application now in this video I want to specifically
dress the individuals that are self-employed independent contractors
and also my landlords who I love you guys I'll be dressing those three
categories in this video specifically how the Paycheck protection program will
apply to you now the definition of self-employed and independent contractor
is if you file taxes and you add Schedule C to your taxes you are
considered self-employed or independent contractor so you could be driving for
uber or lyft or you may have a side gig or side business maybe you freelance on
the side and you get paid 1099 or you self report the income then you would
qualify to be self-employed or an independent contractor now people are we
get into the self-employed part for the Paycheck protection program let's go and
get a quick refresher on what the Paycheck protection program is who
qualifies what are the terms and and how the loan can be forgivable I'm not going
to spend a whole lot of time here so let's do a lightning round and the quick
facts about the Paycheck protection program alright so who can apply all
businesses and khloé not-for-profit veteran organization tribal
is concerned sole proprietorships self-employed individuals and
independent contractors with 500 or fewer employees can apply now there are
businesses that can also apply that have more than 500 poise but there are
guidelines as to which industry that applies to so what can these loans be
used for well the MB must be used for payroll calls including benefits
interest on mortgage obligation in current before February 15 2020 rent
under lease agreements in force before February 2015 and utilities for which
services begin before February 15 2020 where can you apply well you can pretty
much apply it at any local bank such as a credit union a community bank or
national chain that you often see in your neighborhood what are the terms of
paycheck protection program well quickly the maximum amount that you can qualify
for is 10 million dollars you can get a loan deferment up to six months which
means that you don't have to make a single payments on the loan for up to
six months the loan matures in two years with an annual interest rate of one
percent and no personal guarantee is required however if you use these funds
fraudulently and if you lie in your application you could be subject to
criminal charges now here's a part that everyone is interested about which is
the loan forgiveness yes the Paycheck protection program is subject to loan
forgiveness as long as you use it properly within the guidelines that the
SBA has set up for you guys so let me go and break down how exactly you can get
your loan forgiveness under the Paycheck protection program when you apply for
the loan forgiveness you do need several documents as well as some written
records as far as how you use the funds with the Paycheck protection program you
also have to use 75% of the entire loan amount for payroll costs in order for
you to be qualify for loan forgiveness so if you don't have an intention on
using the loan amount to pay your employees or do any payroll this program
may not be the best fit for you but as long as you can show that you've used
the Paycheck protection program alone to pay your employees and 75% of the loan
amount has gone to payroll your loan may be subject to forgiveness under the
Paycheck protection program guidelines you must also keep your employees hired
and there are bonuses for rehiring employees so make sure you don't take
the money pay your employees and then fire them right away
that's debt this doesn't work okay now additionally there are some suggestions
that I've received from my accountant as well as my legal professionals about how
to properly treat the loan amount when you receive them from your lender the
suggestion is that you should have as much record as
but when using the Paycheck protection program such as retaining receipts
invoices documents that show that you paid your payroll as well as your rent
so keep as much document and record as possible additionally my accountant has
suggested that you should have a separate bank account for the Paycheck
protection loan amount mainly because you don't want any commingling and you
want to ensure a clear transaction history that shows that the money from
the Paycheck protection program has gone to use to pay the payroll rent utilities
and interest on a mortgage payment now what is not forgivable is the fact that
you just smash the like button on this video for the YouTube algorithm so if
you have not already going smash the like button and turn the like button to
blue again if you want more information about the Paycheck protection program
I'll go and leave the link down below where it can go read more about it but
next we're gonna get to the self-employed individuals for those who
are independent contractors I want to talk about how the Paycheck protection
program will work for you all right here we are the Paycheck protection program
for self-employed individuals as well as independent contractors let's quickly
break it down how does applies to you and what can do to get the money from
the Paycheck protection program so if you are self-employed or independent
contractor and you don't have any employees well the first thing that the
banks and lenders are gonna look at is your 2019 tax return and they'll most
likely look at what's called your Schedule C now a Schedule C is simply
additional documents and your tax filings that show that you have
self-employed income in your 2019 tax return if your Schedule C is $0 or
you've not found a tax that has a Schedule C unfortunately you will not
qualify for the Paycheck protection program now with your schedule see on
your 2019 tax return your lender is gonna go and look at line 31 this is due
to the fact that the income cap is $100,000 so if you make more than
hundred thousand dollars when your Schedule C well you just have to go with
hundred thousand dollars now what you're gonna do is you can go divide that
number by 12 to get the average monthly schedule seed in that income multiply
that number by 2.5 and this is the amount of the loan so for example let's
say line 31 says you make hundred fifty thousand dollars the loan amount is a
hundred thousand dollars divided by twelve times two point five which equals
twenty thousand eight hundred thirty three dollars so tanika's speaking
that's the maximum amount that you can get with the Paycheck protection program
if you're self-employed or you're an independent contractor now I want to go
thank my friends at entrepreneurs buko which they have been able to
provide some amazing information about the Paycheck protection program for
self-employed individuals as well as independent contractors so if you want
to go read the information yourself I'll go and leave that link down below under
the video description now let's go talk about how the loan forgiveness will work
for self-employed individuals as well as independent contractors according to the
Paycheck protection program guidelines eight weeks worth of 2019 Schedule C
income is forgiven apparently automatically this ultimately means that
you don't have to show any documents invoices or receipts to show that you've
used the loan amount for the appropriate things now going back to the hundred
thousand dollar income example and your schedules see the apparent automatic
forgiveness amount will be fifteen thousand three hundred eighty four
dollars so out of the twenty thousand eight hundred thirty three dollars
fifteen thousand three hundred eighty four dollars would be forgiven math is
pretty simple it's hundred thousand dollars divided by fifty two and then
times again by eight weeks which shows the fifteen thousand three hundred
eighty four dollar amount additionally during the eight weeks following the
funding of the loan any business expenses for utility including business
vehicle gas red interest would be forgiven up to the remaining Unforgiven
amount of the loan so technically the entire loan amount of twenty thousand
eight hundred thirty-three dollars will be forgiven if use for business expenses
now that's pretty much for the self-employed individuals but the new
guideline also dresses the individuals that have partnerships now if your
business is a partnership and you file a ten sixty five for your taxes both you
and your partner's must apply for the PPP loan so you alone cannot apply for
it your entire collective group as a partner's must apply for the Paycheck
protection program together it says the loan amount is based on the
combined self-employed income of the general active partners up to the
maximum a hundred thousand dollars per partner so for example so for example if
there are three partners in your business the maximum loan amount is
three hundred thousand dollars divided by twelve times two point five and that
equals sixty two thousand five hundred dollars for the total loan amount now
it's not addressed that specifically with the new guideline but it is assumed
that the partnerships and the loan forgiveness part will be the same thing
as the proprietors and self-employed individuals so the math is basically
three hundred thousand dollars divided by 52 times eight weeks which shows
about forty six thousand $154 that is subject to forgiveness again you can use
expenses utilities rent interest on mortgages that could also be added to
the loan forgiveness aspect of the partnership now the question remains
what about landlords what if you own a rental property and that's pretty much
the income that you have on top of your job or maybe you have other businesses
but what happens to landlords now because rental property income is not
technically Schedule C it's actually for maybe a 25 or Schedule E the SBA really
hasn't created a guideline as far as how form 88 25 or Schedule E will be treated
but so far the guideline that we do have is individuals that have Schedule C
independent contractors may be you file 1120s which is an S corporation the SBA
says that paycheck protection program is for you but I have not found any
information about individuals that owned rental properties therefore we file a
Form 88 24 Schedule E if you are in landlord watching this I do suggest that
you have a conversation with your accountant or a tax professional as to
which tax documents you file if it's for maybe a 25 or a Schedule E I would
definitely find and if you file a Schedule C for some reason because you
have an Airbnb hospitality business or maybe you have a property management
business then the guidelines of the picture protection program would apply
to you I'll continue to update you guys as long as you subscribe to the channel
and hit the bell notification icon so that you get notified when a video comes
out now for you landlords what might be a better fit for you then the Paycheck
protection program might be the economic injury disaster loan which I like to
call the idle loan an additional sixty billion dollars of funding has been
added to the idle program this week so it is again open it hasn't ran out of
money yet so definitely go and apply for the economic injury disaster loan there
is a part in the application where you can go and put in how much of the rent
that you've lost due to the corner virus pandemic and this is the program where
it gives you up to ten thousand dollars of grant money upfront within three days
of applying the grid is based on employee count or subcontractor counsel
if you have handyman subcontractors plumbers you can add all those in as far
as how much money can potentially get with the SBA idle grant so that's pretty
much it for the update guys if you have any any questions about the Paycheck
protection program or the economic injury disaster loan go and leave it
down below as always subscribe to our channel and hit the bell notification I
if you want to get notified on future updates and videos and go and check out
some of the other videos I created about SBA programs and the economic stimulus
programs that are out there on the table as a proposal