Reply
Community Manager
Community Manager

Ask The Expert: Small Business COVID-19 PPP Loans and Taxes

Coronavirus continues to impact small businesses.  To help sustain small businesses, the Small Business Administration has launched a second draw of the Payment Protection Program (PPP) loans. Are you thinking about applying for the second round?  Already applied? Or, do you have questions about filing your small business taxes from the first round of loans received?  

 

Join us February 8-15, to get your questions answered by Roderick (Rod) Johnson (RoderickJ614381), SBDC Project Officer of the Small Business Administration (SBA), a lending specialist and AARP Expert, Felicia Brown (@FeeBrown).  Take advantage of this special program and learn how to navigate the tax implications to help you prosper in 2021

 

To participate, please log in then click "reply" to post your question below.
Not Registered? Click here. Thank you!

0 Kudos
17,352 Views
74
Report
Reply
Periodic Contributor

What type of businesses do you all have in mind starting? A hauling company, a restaurant, insurance company, janitorial cleaning company, nail shop?

0 Kudos
7,612 Views
2
Report
Reply
Periodic Contributor

How many of you have a relationship with a Business Banker or Commercial Banker? 

0 Kudos
7,111 Views
0
Report
Reply
AARP Expert

@RoderickJ614381 are there any ideal type of businesses to start given our current environment?

0 Kudos
7,107 Views
0
Report
Reply
Periodic Contributor

Stop worry about taxes and be concerned about growing revenues, managing your company's expenses and showing a net profit! As I stated in an earlier post, 80% of businesses fail within 5 years due to poor planning (lack of a well thought out business plan), lack of management expertise, lack of seed capital, and no real demand for the product or service. 

 

Just understand this about taxes. They will go up to fund the trillions of dollars we are spending on Covid19 to keep businesses afloat. We all in 2022 and beyond will bear the burden of higher taxes

0 Kudos
4,417 Views
0
Report
Reply
Periodic Contributor

Good afternoon. How many of the women and minorities have applied for PPP and EIDL this week and today? How many of you have filed your 2020 business tax returns already? To get a new loan, how many have your 2018, 2019, and 2020 business tax returns, your 2018, 2019, and 2020 personal tax returns ready, how many have completed a personal financial statement for 2021, do you have your accounts receivable and payable aging reports as of 12/31/2020 ready. All this information is needed to apply for a new commercial loan from a bank or credit union.  The PPP, EIDL, State and Local loans and grants are out there for you to take advantage of. Go get the money. You can get help from Score, the Small Business Development Centers, the Women Business Centers, and the Veterans Centers. Go get free assistance. How many of you have applied for forgiveness from the first round of PPP?

0 Kudos
4,455 Views
0
Report
Reply
AARP Expert

It's Day 3 and I hope you have this conversation to be engaging and informative.  Remember, we are here for you.  We want your questions, hear about your experiences, and hopefully preparing you to start or take your business to the next level.

 

We have with all week @RoderickJ614381 from the SBA who is knowledgeable about all things small business lending.  He is here for you.  Periodically, you will hear him sharing information and chatting about loans.  Don't be afraid to ask him questions.

 

So, @RoderickJ614381 to kick us off, are there any myths business owners have about applying for loans?

0 Kudos
4,496 Views
2
Report
Reply
AARP Expert

I hope everyone is listening to @RoderickJ614381 he is encouraging under the sound of his voice to "go get the money".  There is out there especially for minority owned businesses.  We know many struggled this past year and the SBA is working with local funders to make more money available.

0 Kudos
4,394 Views
1
Report
Reply
AARP Expert

@RoderickJ614381 while I know you are not a tax advisors but given what you know, what are some questions a new business owner should ask regarding their taxes this season?

0 Kudos
4,273 Views
0
Report
Reply
Social Butterfly

I hope this isn’t one of those scam loan  operations with usurious interest rates!

0 Kudos
3,148 Views
2
Report
Reply
Periodic Contributor

Commercial Banks, Credit Unions and CDFIs are all regulated and do not charge usuary rates for loans.

0 Kudos
2,652 Views
0
Report
Reply
AARP Expert

@2Papa as with anything recommended, you should do your research to ensure it's applicable to your situation.  Remember, we don't give advise we give you resources and tools you can use but always consult with your business and financial advisors.

0 Kudos
3,086 Views
0
Report
Reply
Periodic Contributor

Need a new business loan and you are in Washington, D.C. and want to bank with an 87 year old community bank? Call Tina Carter at Industrial Bank at 202-722-2000. Let her know Rod Johnson sent you. 

 

Bank with Richard Cole at the Northwest Federal Credit Union 703-709-8900 x4268 if you want a small friendly credit union in Northern Virginia. Tell him Rod Johnson sent you.

 

If you are in Prince George's County and want to bank with a small friendly credit union call Diane Brown at 202-467-7245.

 

Go get the money from your local bank wherever you are located

0 Kudos
3,079 Views
0
Report
Reply
Periodic Contributor

As an U.S. SBA employee I can only state that as a business owner, you have to research what your state and local governments are offering in terms of small business loans and grants. I only work with Federal government programs, which are the PPP and EIDL. EIDL is a loan with a maximum of $150K at 3.75% for for profit organizations and 2.75% for nonprofit organizations. For loans over $25,000, the SBA will take a blanket lien on the business assets. The first 12 months of the loan is deferred. However, interest does accrue during that 12 months. The money is to be used for payroll and business expenses (rent, lease, interest on a commercial mortgage, internet, cell phone, business phone, software, ). The EIDL loan is being targeted to businesses located in low to moderate income areas. For information on PPP and EIDL loans please go to SBA.GOV or SBA.GOV/PPP. 

0 Kudos
3,108 Views
7
Report
Reply
AARP Expert

@RoderickJ614381 we all know we are on the heels of tax season.  What should a small business be aware of if they applied and received PPP and/or EIDL funding?

0 Kudos
3,030 Views
6
Report
Reply
Periodic Contributor

Now is the time to apply for a SBA 7A, 504 or Micro Loan to grow your business. You the borrower do not pay an SBA fee for any of those products. The bank receives a 90% guaranty from the SBA for loans up to $5MM. For the SBA Express, the bank receives a 75% guaranty for loans up to $1MM. Go get the money from your local bank!

0 Kudos
2,810 Views
1
Report
Reply
AARP Expert

@RoderickJ614381 how does one learn of these micro loans - do they simply go to SBA.gov?  You know applying for a loan can be cumbersome for a new owner, is there someplace they can go to get assistance for ensuring the paperwork is accurate?

0 Kudos
2,740 Views
0
Report
Reply
Periodic Contributor

There are no real tax consequences associated with PPP and EIDL.  EIDL is a loan and PPP is a loan that if fully forgiven turns into a non taxable grant. 

 

0 Kudos
2,822 Views
3
Report
Reply
AARP Expert

@RoderickJ614381 for those small businesses where they don't qualify for the PPP loan to be forgiven how should the owner be aware of...what questions should they ask their tax preparer?

0 Kudos
2,717 Views
2
Report
Reply
Periodic Contributor

I am loving the questions. Keep them coming. First, get free assistance from Score, the local Small Business Development Center near you, a Women's Business Center near you and the Veterans Business Center near you is how you find out about loans of all types. I cannot say enough all you need to know about business is to go to SBA.Gov. 

 

These tax questions keep coming about PPP and EIDL. There are no tax questions business owners need to ask their CPA as they regard the two loans. Its very simple: a business has revenue, their are expenses associated with running the company that will show up on the income statement. Again if there is a net loss, there are no taxes to pay. If there is a net profit, you will pay taxes that. The amount of taxes paid is determined by how much a net profit is shown and your business structure. PPP and EIDL is not about taxes or tax planning. The programs are designed to give your company an infusion of cash to maintain your business.

0 Kudos
2,683 Views
1
Report
Reply
Contributor

Thank you!

0 Kudos
2,028 Views
0
Report
Reply
AARP Expert

It's day 2 of our conversation with @RoderickJ614381 our lending expert at the SBA.  Again, he's sitting with us this week ready to answer your questions all things loans.

 

To kick us off, @RoderickJ614381 for someone just launching their business what suggestions do you have as it relates to funding their business?

0 Kudos
3,129 Views
0
Report
Reply
Periodic Contributor

The PPP first draw is up to $10MM. The PPP second draw is up to $2MM.

0 Kudos
4,327 Views
0
Report
Reply
AARP Expert

Welcome to our first day of talking all things small business lending, particuarly as it relates to the latest draw of the PPP and taxes.  All week we have a guest from the SBA, @RoderickJ614381 who is a lending expert.  He his prepared to answer all your questions.

 

To kick us off, @RoderickJ614381 can you tell us about the latest PPP loans?  How do you apply? What can you use the money for? How much can you access for your business?  What about other loans if someone does not qualify for the PPP?

4,352 Views
19
Report
Reply
Periodic Contributor

You have approximately 35 days to file your corporate taxes. Please file them on time if you expect to apply for a new loan from a bank for growing your company. The same goes for your personal taxes. File them on time please.

0 Kudos
2,523 Views
0
Report
Reply
Contributor

.

0 Kudos
4,006 Views
5
Report
Reply
Periodic Contributor

Hi: I want to encourage all women and minority owned companies get a portion of the $284 Billion dollars that Congress approved for small businesses. Right now there is approximately $200 billion left. The program ends March 31, 2021 or when the money runs out. How many women and minority owned companies have applied for the EIDL or PPP loans to sustain your business? If you have not applied why not? Do you need assistance? Go to your local financial institution to get the money now:-). 

 

Do you know that CDFI's and Community Banks were open January 11, 2021 -January 15, 2021 only for minorities to receive first dibs on the money? EIDL money now is being targeted for businesses located in low and moderate income areas. There is $40 billion set aside for minority owned businesses. Go get the money!

0 Kudos
2,354 Views
1
Report
Reply
Contributor

Good to know, thank you!

0 Kudos
1,923 Views
0
Report
Reply
AARP Expert

@bmarhefka we have @RoderickJ614381 to help you with your question.

0 Kudos
2,380 Views
0
Report
Reply
AARP Expert

@RoderickJ614381 what do you recommend for @bmarhefka

0 Kudos
2,787 Views
0
Report
Reply
AARP Expert

Great Question!  Let's see what @RoderickJ614381 has to say about your situation.

0 Kudos
2,846 Views
0
Report
Reply
cancel
Showing results for 
Show  only  | Search instead for 
Did you mean: 
Users
Need to Know

"I downloaded AARP Perks to assist in staying connected and never missing out on a discount!" -LeeshaD341679

AARP Perks

More From AARP