Economic Relief Program Information
Real estate investors enjoy the benefits of working for themselves, however, with the current global situation and being unsure if they will receive their monthly payments from their rental properties or be able to sell properties for the originally projected profit can leave them worrying about how to meet their obligations and how to move forward. The SBA has made it possible for independent contractors, and sole proprietors, such as real estate investors to qualify for Economic Injury Disaster Loan (EIDL) small business loans up to $2 million, which can be used to help pay their obligations and supplement the income they may lose at this time. The SBA also waived the rule prohibiting businesses that have access to lines of credit, there is no need to use real estate as collateral, the interest rate for this loan is 3.75%, the term of the loan is up to 30 years and the 1st payment is being deferred for one year from the date of the loan The small businesses that apply for the loan can ask to receive an advanced grant of $10,000, calculated as $1000 per employee, which can be eligible to be forgiven. The application to apply for the EIDL can be found at www.sba.gov.
There is also the Paycheck Protection Program Loan which is being handled through local lenders approved to work with the SBA and is eligible to be forgiven if 75% of the loan amount was used in the 1st 8 weeks to pay for their payroll expenses, mortgage interest (not principal), and utilities. The interest rate on this loan, if not forgiven, is 1%, and the term of the loan is 2 years. In order to apply for this loan, you would need to contact the bank you currently have a business account with see if they are a lender working with the SBA, or you can visit www.sba.gov to look for a list of lenders.
The CARES act created a new program called Pandemic Unemployment Assistance, which allows independent contractors to apply for unemployment insurance and will provide assistance from late March until July and will provide $600 a week unemployment pay. While it may take a while for these unemployment benefits to be paid out. It is important to apply early because they will be making back payments effective from March 15, 2020. In order to apply for unemployment benefits, you would need to visit your state unemployment insurance website and follow the instructions.
To apply for any of these benefits, it is important to make sure all of your Expenses and Incomes up-to-date and to know your financial position. It is also important to make sure he you have a 90-120 day plan in place to help navigate the current economic climate, and to be prepared to continue investing successfully, once the economy begins moving again. If choosing to apply for any of the loan. It is important to remember to borrow responsibly and ensure you will have the ability to pay back the loan. A bookkeeper familiar with working with real estate investors can help simplify this process.
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