SBA loan/grant for lost rent on timeshare rentals

[emeryjre]

I have been doing some research on the new SBA loan program for small businesses and lost rent. While the guidelines for the loans are still being disseminated to the banks, there seems to be some relief for landlords losing rent because of recent events.

I am not going to apply for the loan myself at this time because I have rolled all my cancelled weeks into later dates and hoping to be able to rent them in the future. I know that there are timeshare owners that are in a different situation than I am, and may benefit from this program now.

I know there has not been a lot of information about the SBA loan program broadcast on the news, except for politicians claiming credit for helping their constituents. I do not want this thread to denigrate into a political discussion.

I would like any TUG members with information on this program to comment. Will this program help timeshare owners that rent out timeshares? Would the business need to file a tax return to be eligible? I will try to tap any resources I can find to add to this thread.

For anybody that wants to jump in and apply first and sort it out later, the link is https://covid19relief.sba.gov/#/

I know there is an application portal at SBA.GOV with lots of information scattered around the website. I will be spending time researching the information and will post what I find that may be helpful.

Stay safe everyone

 

[chapjim]

I don't think I'm big enough to be considered a small business!

And, there are some here on TUG who think I'm a mega-renter!

 

[CalGalTraveler]

Probably would not qualify for PPP loan because there is no payroll.

EIDL would depend on whether SBA would permit schedule E AirBnB type vacation rental businesses to be included in the grant.

 

[pchung6]

I applied SBA loan/grant 2 weeks ago due to income lost from my rental properties and timeshare rental. 3 of my 9 renters (probably will be more) already informed me they won't pay until July or until they find new jobs and also lost 2 timeshare rentals. So far, I haven't heard anything back beside receiving my application #.

 

[TravelTime]

I have been doing some research on the new SBA loan program for small businesses and lost rent. While the guidelines for the loans are still being disseminated to the banks, there seems to be some relief for landlords losing rent because of recent events.

I am not going to apply for the loan myself at this time because I have rolled all my cancelled weeks into later dates and hoping to be able to rent them in the future. I know that there are timeshare owners that are in a different situation than I am, and may benefit from this program now.

I know there has not been a lot of information about the SBA loan program broadcast on the news, except for politicians claiming credit for helping their constituents. I do not want this thread to denigrate into a political discussion.

I would like any TUG members with information on this program to comment. Will this program help timeshare owners that rent out timeshares? Would the business need to file a tax return to be eligible? I will try to tap any resources I can find to add to this thread.

For anybody that wants to jump in and apply first and sort it out later, the link is https://covid19relief.sba.gov/#/

I know there is an application portal at SBA.GOV with lots of information scattered around the website. I will be spending time researching the information and will post what I find that may be helpful.

Stay safe everyone

Just an FYI. The EIDL, aka SBA economic injury disaster loans, is separate from the Paycheck Protection Program (PPP). The PPP is admistered by the banks. The EIDL is administered directly by the SBA and that is the link you supplied. From your description, I could not tell for sure if you are referring to both programs or one of them. You mentioned the banks, which seems to refer to the PPP. But you provided the link to the EIDL.

 

[emeryjre]

TravelTime, these are the kinds of things I am trying to sort out. Which program is designed for landlord/owners.

I agree that it is probably not the PPP since that is designed to keep employees working.

So the EIDL money is coming directly from the Small Business Administration and does not involve a bank. Thanks for that info.

 

[TravelTime]

TravelTime, these are the kinds of things I am trying to sort out. Which program is designed for landlord/owners.

I agree that it is probably not the PPP since that is designed to keep employees working.

So the EIDL money is coming directly from the Small Business Administration and does not involve a bank. Thanks for that info.

I just attended a live video session with Paychex, my payroll provider. They are sending out the slides in the next day. I will see if I can post the slides or at least share the parts where they talk about who is eligible for PPP vs EIDL. A big part is what you are allowed to spend the money on. I did not see anything for either program indicating you can spend the money on lost revenue. They both appear to cover operating costs like business payroll, business rent, etc.

 

[CalGalTraveler]

There are certain conditions that must be met to get the $10k advance grant forgiven.

"These grants may be used for:

• providing paid sick leave to employees unable to work due to the direct effect of the COVID–19;
• maintaining payroll to retain employees during business disruptions or substantial slowdowns;
• meeting increased costs to obtain materials unavailable from the applicant’s original source due to interrupted supply chains;
• making rent or mortgage payments; and
• repaying obligations that cannot be met due to revenue losses.

These grants do not have to be repaid."

Would TS maintenance fees count under the last 2 bullets?

We have property taxes, utilities and insurance on a vacation rental property that are normally covered by summer rentals but due now. Would paying such expenses by credit card apply for foregiveness under "repaying obligations"? Specifically we just paid April property taxes for the rental on a credit card. Would that be considered an "obligation?" We will have to loan the property business money to cover this credit card payment unless we receive a grant.

 

[TravelTime]

Here is the presentation I participated in today.

 

[R.J.C.]

Unless someone actually created a business, pays taxes on all profits, and follows all business regulations, I don't think they would be eligible for an SBA loan at any point in time. 99% of all folks who rent their timeshare are just that, folks who rent their timeshare, not a business.

 

[dioxide45]

Unless someone actually created a business, pays taxes on all profits, and follows all business regulations, I don't think they would be eligible for an SBA loan at any point in time. 99% of all folks who rent their timeshare are just that, folks who rent their timeshare, not a business.

I would also suspect that those that apply should have a Schedule C or K in order to qualify?

 

[VacationForever]

It appears that payroll for employee is a key criterion. There is not an employer-employee relationship in a rental business.

 

[CalGalTraveler]

It appears that payroll for employee is a key criterion. There is not an employer-employee relationship in a rental business.

Payroll is required for the PPP program but there are ways to calculate for a sole proprietor without a formal paycheck. @TravelTime posted this helpful article on the PPP thread. https://www.forbes.com/sites/briant...aycheck-protection-program-loan/#6e6991123710
Because of the focus on payroll PPP may not be the right program for a timeshare.

For EIDL program, payroll is not required. Rental real estate (long-term and vacation rentals) are on schedule K so may possibly qualify since rental real estate qualifies. You would have to provide a 2019 P&L/schedule K tax statements or other statements such as a vacation rental permit demonstrating the business was in existence on Jan 30 2020. NOTE: I am not a CPA and still learning about this program. It appears a wholly owned short-term vacation rental would qualify because that is a business and with insurance, a business license and permit. For timeshares, there are a number of mega renters on TUG who might qualify if they have the tax statements to back it up.

 

[emeryjre]

TravelTime and CalGalTraveler, Thanks for the information.

 

[presley]

I would like any TUG members with information on this program to comment. Will this program help timeshare owners that rent out timeshares? Would the business need to file a tax return to be eligible? I will try to tap any resources I can find to add to this thread.

While I can't answer your question directly, I would recommend that you at least go ahead and start the application. The application said it would take over 2 hours to fill out, but could take less if I didn't need to fill out every section. Mine only took about 20 minutes. FWIW, I applied 3/30/20 and still haven't heard anything back. I did call them a couple days ago to check on it and was told that there are so many applications, it's taking a long time to hear back and eventually, they will send me a link that we will use to go to the next step.

We have a different business (small healthcare office). I think the questions probably populate based on how you answer stuff. I think I needed to put in last year's gross income and cost of goods sold. It asked how many employees we have, but I don't think it asked how much we paid for payroll, but that's easy for them to lookup. They wanted our corporation #, tax ID for the corp and ss# for my husband to look at personal taxes, too. It was all very basic and seemed too good to be true. Now that it's been a couple weeks and I haven't heard anything, I see why it seemed too good to be true.