PPP w/o Schedule C?

[vitfitprayer]

@itjesus I'm going to do my best to return mine by then. I think that will be best. This program was not made or intended for us sole props. They say it was but there is too much grey area. I don't need the FBI arresting me for fraud. I have $10k of mine left, it'll leave me with $0 in my account. Have to find somewhere to fine the other $12.5k.

 

[itjesus]

@vitfitprayer You may not have to return the money given that you were approved for the loan based on profit/loss anyway. My situation is different in the sense that I only submitted my 1099-MISC, and wasn’t asked for Schedule C (profit/loss). So when I do go to file my 2019 taxes, In order to keep the loan in good faith I’d need to report $0 in losses and pay taxes on that. The taxes paid would overrule the PPP income I’d pay myself if I keep it.

 

[vitfitprayer]

@itjesus Well my concern is I didn't get something else correct or answered a question right. Now that my EIDL loan app is in processing I'm worried they will find an issue and charge me. They make it sound like they aren't giving any leeway on this, if you screwed up, you're getting charged and you're going to be arrested. I don't have money to pay this back, I for certain don't have money to hire a lawyer to find federal bank fraud charges.

 

[itjesus]

@vitfitprayer If you know that you screwed something up, then I’m with you. Better safe than sorry. I still feel as if PUA is a viable option if you’re without work right now.

Although I didn’t “mess up” anything on my docs/app, personally, I’m still concerned about the language around the PPP for the self employed and independent contractors, specifically. If I knew that the data they used to calculate my approval would be sufficient to get forgiveness, I would probably keep it. But seeing now that Schedule C is the doc they’re basing forgiveness off of, I can’t keep the loan and run the chance of owing $ and paying much higher taxes bc of it too

 

[fender57]

@itjesus I used 1099-MISC when I applied and was approved 04/16. I was contacted three days ago that I needed to submit 2019 tax returns or 2018 tax returns. I haven't filed 2019 taxes yet and the business was not in operation in 2018. So I filled out a Schedule C and submitted that, have not heard a thing since then. How do you know you're funding today? Did they send you loan documents?

 

[itjesus]

@fender57 I’ve been in touch with my loan officer pretty much daily. Fortunately I got my docs and signed on May 1st, so I dodged the “double signing” w/ Ready Cap and Customer’s Bank, and only had to sign once w C.B.

I provided bank statements and a blank check, as those were the only items asked of me that were missing.

Was told by loan officer that funds would be deposited today (tomorrow is the last day they’d have to fund me anyway) and also got an email correspondence from Ready Capital saying I was in the funding process

 

[liztaylor972]

@itjesus "I ’m afraid that when I file my taxes there will be major issues and as tempted to just send back the $$.. anyone else in a similar boat? "

You will have major issues if you don't return the excess amount. You acknowledge that you inflated your net earnings to get a larger loan - that is clearly fraud. Take advantage of the safe harbor the SBA has given and return the excess at least if not the entire loan before May 14th.

 

[itjesus]

@liztaylor972 I didn’t inflate my net earnings. When I filed for PPP the system was new, and the requirement was to submit my 1099-MISC, divide that income by 12 and multiply that by 2.5. There was NO requirement for a Schedule C. Nor did my loan officer ask for one. Nor did Lendio, Ready Capital, or Customer’s Bank ask for one.

I will, however, be returning the PPP loan unless my CPA gives me better guidance. The main point of this post is to highlight the inconsistencies in applying for and receiving PPP funding. Even the regulations and guidance given by the gov’t has changed since I first applied. The problem is, I had ALREADY applied and been approved! And as of today (5/7) funded.

How in the WORLD do three separate entities even allow for this to happen in the first place..? I mean c’mon. Between Ready Cap, Lendio and Customers bank, if they needed Schedule C from me why was it never requested? They’ve asked for bank statements, a 1099, Identification and a blank check from me. Provided that and got the loan. If the gov’t decides to change the language behind the loans during their second round of funding, am I truly the one at fault here for doing and providing exactly what was asked from me?

 

[liztaylor972]

@itjesus They told sole proprietors to hold off, when they opened it up to them they released the guidance that spelled out what net earning were.

Yeah, they were building the ship while sailing it and that wasn't pretty - but you clearly know what the rules are now, you said you didn't provide your schedule C because you knew it would bring down your loan amount. You recognize that the discrepancy will be obvious to the regulators once you file your taxes. So yeah, I think you know what you need to do.

 

[itjesus]

@liztaylor972 You’re certainly right w/ that analogy. It has been a nightmare of a ride. But when I applied, it was open for independent contractors. And again, I didn’t provide my schedule C because it wasn’t a requirement at the time nor was it asked for after the fact.. not because it would bring down my loan amount. That would be fraud. I haven’t filed my 2019 taxes, therefore I wouldn’t even know what to estimate for my schedule C this year. I certainly wouldn’t have been prepared to provide it had they asked for it, and subsequently I would’ve backed out right then. Everything I’ve done has been in good faith, and also w/ no help. These are the kinks that gov’t has to work out in the future. There should’ve 100% been a separate program for single-person, self employed persons.

 

[liztaylor972]

@itjesus

not because it would bring down my loan amount.

That isn't what you said in your post:

" I provided 1099-MISC (gross) rather than Schedule C (net) because:...

B: As an independent contractor, I pay for all of my own overhead. Gear, rent, etc, which significantly brings down my net income + taxes owed after calculating those losses... which in turn brings down my forgivable loan amount (to my knowledge)"

" I haven’t filed my 2019 taxes, therefore I wouldn’t even know what to estimate for my schedule C this year "

I assume you are a competent businessman so I find it hard to believe that you don't have a good estimate for what your expenses were last year.

 

[itjesus]

@liztaylor972 It could’ve been worded better, sure. Again, this is my first post. My reasoning for providing 1099 was clearly highlighted in point A though. Which was that I wasn’t asked of it, and it wasn’t a requirement at the time. Point B was an addendum furthering my concerns.

 

[monastic1952]

@itjesus update? what did you do with the money?

 

[dogwoodtree]

@itjesus I submitted bank statements, 1099s and Profit and Loss sheet when I applied. I haven't filed my 2019 taxes.

I received a SBA PPP Loan Docusign from Lendio/Ready Capital on Wednesday that I signed and sent the required bank account and routing info.

This morning at 6am I received an email from Ready Capital that says:

" Due to a more recent change in the Paycheck Protection Program guidance, we now need your Schedule C for us to further verify your payroll because of your sole proprietor status.We apologize for the additional document and delay, but unfortunately this guidance came out after virtually all our applications were already processed, which is why we did not ask for it upfront."

Does this mean I have to now file may taxes ASAP so I can send in my Schedule C?! Uuuuugh.

 

[itjesus]

@dogwoodtree Yes, more than likely. Unless your profit and loss statements were sufficient, but I would email your loan specialist and ask. They’re starting to realize that those of us who applied early on weren’t required to send schedule C. You can always estimate, but I would say knock out taxes so your Schedule C reads the exact same come time to apply for forgiveness.

 

[monastic1952]

@itjesus Was your income documentation one 1099-MISC? Did you have multiple 1099s you showed them? Sorry if you already explained this elsewhere.

 

[kbupdike]

@itjesus I submitted an application with lendio on 4/13. I'm an ubereats driver and doordash driver. I just started in December of 2019. So i haven't received any 1099 or a shedule c whatever that is. All I could submit was screenshots of the doordash and uber earning statements inside the apps themselves. Followed by screenshots of my bank statements verifying those funds deposited. I never heard anything from lendio until 4/25 stating my application was submitted to a lender. Last monday I received a call back from a lendio rep finally with very confusing information.

The rep said unfortunately without a shedule c or 1099 they won't be able to submit my application. I stopped him in the middle of his sentence and said "you sent me an email on the 25th stating my application was already submitted to a lender. Now you are telling you haven't even submitted my app"

He places me hold comes back and says "sir your application was submitted to a lender such and such bank will be contacting you shortly" I said but you just told me you won't be able to submit my application without those forms.

His reply to that was "I am sorry lendio had failed you and then he hung up on me" haven't heard heard from them since. Haven't heard from the bank either. At this point I'm not even sure if lendio submitted my application at all. I went out and applied to 5 other lenders immediately still waiting. This is complete bullshit.