Here are some important take-aways from the SBA guidance given.
- Though this link provides procedures, you do not apply for this loan directly with the SBA. The application process is with a local lender. See How to Apply at the SBA link above.
- Loan deferral was set at six months. The legislation originally said 6-12 months.
- The terms of the loan were set by the SBA at:
- 0.5% interest rate
- 2-year maturity
- The calculation of the loan amount requires the borrower provide to the lender tax documents and affirmation that the tax documents provided are identical to what was submitted to the IRS. If this requires the use of W-2s and 1099s to verify payroll expense calculations, then housing allowance may not be allowable in the payroll calculation and may not be a forgivable payroll expense, since housing allowance is not included on W-2s. If you decide to include housing allowance with the approval of your lender, please understand the potential risk if the housing allowance is not deemed allowable and forgivable. Richard Hammer, respected lawyer and CPA, indicated in his webinar that inclusion of housing allowance is not in the legislation and needs clarification. If this is not clarified by congress or the SBA the most conservative stance would be to not include housing allowance. The application certification that I am referring to is provided below:
I acknowledge that the lender will calculate the eligible loan amount using tax documents I have submitted. I affirm that these tax documents are identical to those I submitted to the IRS. I also understand, acknowledge and agree that the Lender can share the tax information with SBA's authorized representatives, including authorized representatives of the SBA Office of Inspector General, for the purpose of compliance with SBA Loan Program Requirements and all SBA reviews.
Please see new loan calculation tables, replacing those provided yesterday. The only change is the warning regarding the use of housing allowance.
