5 ms·

Show HN: SBA PPP Loan Forgiveness Calculator

39 points by latortuga 6y ago

underbluewaters 6y ago
If this is accurate, it could be very educational. I was discussing these "loans" with my Dad who owns a business with a lot of employees and was worried that he was taking on debt. He explained to my relief that a great deal of the loan would be forgiven. Not being a business owner and having to know the details of the program, I had assumed that these were merely favorable interest rates. Seems like the politicians could have branded this program better. It sounded on the surface like they were just loading up small businesses with more debt.
- socketnaut 6y ago
  Framing it as a loan seems like a good way to get funds out as quickly as possible while making it easier to get back anything that's misused.
- latortuga 6y ago
  They are definitely favorable conditions, you get the loan at 1% interest and are eligible for forgiveness of up to 100% of the loan if you use it on certain types of expenses. Also, payments are deferred until after the initial period is up (June 30th). Overall a very positive program. By making the funds loans, they also were able to quickly disburse them by using the existing legions of SBA lenders.
  - dariusj18 6y ago
    Though getting a loan through a big bank was neigh impossible. My fiancée's company banks with Wells Fargo and they didn't even get the application (after applying to get an application) until the first round of funds were gone. Thankfully they then applied with several smaller banks and was able to get one from with the new funding.
    - latortuga 6y ago
      I think that unfortunately this heavily depended on your bank. Wells Fargo really dropped the ball, but Bank of America was one of the first banks to accept applications and therefore disburse money. We used a regional bank whom we had an existing relationship with and it went pretty smoothly, better than if we had tried with WF.
      - icelancer 6y ago
        >> Wells Fargo really dropped the ball This implies that they screwed up and they might deserve forgiveness. They had no intention of lending PPP funds except for large preferred accounts they wanted to help.
        zieski 6y ago
        Not defending Wells Fargo at all, but they were also limited due to restrictions placed on them for some of their criminal activity and therefore had a limited pool to lend with for PPP.
        icelancer 6y ago
        Legitimate. Thanks for bringing that up. Wasn't aware.
deleted 6y ago
[deleted]
henriquez 6y ago
Amazing work! This seems like a great way to clear up uncertainty around these loans. It's worth clarifying that (unless Congress changes something), loan forgiveness counts as a taxable event. Meaning a business would have to pay income tax on the amount of the loan that was forgiven, typically at the time it's forgiven. This could be preferable to paying the loan, but might require taking on a new (smaller) loan to cover the tax liability.
- latortuga 6y ago
  Thanks for the kind words! There certainly is uncertainty around these loans. We wanted to make it super simple to estimate how much you could get forgiven, given what we currently know from the law itself and the SBA guidance.
- dbjacobs 6y ago
  Actually the CARES Act states loan forgiveness is not taxable (Act §1106(i)) [1], but also prevents businesses from then taking a deduction for expenses paid with the money (so no double benefit). [1] - https://www.congress.gov/116/bills/hr748/BILLS-116hr748eas.pdf https://www.congress.gov/116/bills/hr748/BILLS-116hr748eas.p...
indymike 6y ago
Nicely done! I really like how clear the UI is. This will clear up a lot of "how do we use the PPP money?" arguments that are going on.
themagician 6y ago
Maybe I'm wrong about this, but the wording on the site makes it seem like those who make over $100,000 are exempt from forgiveness entirely, but it was my understanding that the are covered, just not beyond $100,000. So you can pay someone over the $100k annualized threshold, it just won't add to the amount forgiven. So the single person cap is effectively $16,666 (($100k/12)*2). Am I wrong?
- zieski 6y ago
  The SBA may release more guidance but as of now payroll costs over $100k are not included in the calculation of the eligible loan amount. They have not been excluded from forgiveness. However, the forgiveness penalties for reductions of more than 25% in wages/salary for employees does not apply to employees making over $100k.
nodesocket 6y ago
If you are self employed and no employees how does the payroll section work? For example, I don't have a fixed payroll. I am setup as a single member LLC (disregarded-entity) and just transfer money from the business checking into my personal checking when appropriate. No formal payroll solution.
- hartator 6y ago
  Yes, I wonder the sane thing.
- tcas 6y ago
  From my reading of the interim rules, it's based on your 2019 Schedule C Line 31 (Total Profit and Loss), capped at 100k. For forgiveness it's: ($100,000 / 52 weeks) * 8 weeks = $15,384. The rules and new clarifications seem to change every week, I'd consult a CPA before assuming anything.
  - danalt 6y ago
    it's 10 weeks (2.5 months) not 8. Therefore: ($100,000 / 52 weeks) * 10 weeks = $19,230.

39 points by latortuga 6y ago

If this is accurate, it could be very educational. I was discussing these "loans" with my Dad who owns a business with a lot of employees and was worried that he was taking on debt. He explained to my relief that a great deal of the loan would be forgiven. Not being a business owner and having to know the details of the program, I had assumed that these were merely favorable interest rates. Seems like the politicians could have branded this program better. It sounded on the surface like they were just loading up small businesses with more debt.

socketnaut 6y ago
Framing it as a loan seems like a good way to get funds out as quickly as possible while making it easier to get back anything that's misused.
latortuga 6y ago
They are definitely favorable conditions, you get the loan at 1% interest and are eligible for forgiveness of up to 100% of the loan if you use it on certain types of expenses. Also, payments are deferred until after the initial period is up (June 30th). Overall a very positive program. By making the funds loans, they also were able to quickly disburse them by using the existing legions of SBA lenders.
- dariusj18 6y ago
  Though getting a loan through a big bank was neigh impossible. My fiancée's company banks with Wells Fargo and they didn't even get the application (after applying to get an application) until the first round of funds were gone. Thankfully they then applied with several smaller banks and was able to get one from with the new funding.
  - latortuga 6y ago
    I think that unfortunately this heavily depended on your bank. Wells Fargo really dropped the ball, but Bank of America was one of the first banks to accept applications and therefore disburse money. We used a regional bank whom we had an existing relationship with and it went pretty smoothly, better than if we had tried with WF.
    - icelancer 6y ago
      >> Wells Fargo really dropped the ball This implies that they screwed up and they might deserve forgiveness. They had no intention of lending PPP funds except for large preferred accounts they wanted to help.
      - zieski 6y ago
        Not defending Wells Fargo at all, but they were also limited due to restrictions placed on them for some of their criminal activity and therefore had a limited pool to lend with for PPP.
        icelancer 6y ago
        Legitimate. Thanks for bringing that up. Wasn't aware.

deleted 6y ago

[deleted]

henriquez 6y ago

Amazing work! This seems like a great way to clear up uncertainty around these loans. It's worth clarifying that (unless Congress changes something), loan forgiveness counts as a taxable event. Meaning a business would have to pay income tax on the amount of the loan that was forgiven, typically at the time it's forgiven. This could be preferable to paying the loan, but might require taking on a new (smaller) loan to cover the tax liability.

latortuga 6y ago
Thanks for the kind words! There certainly is uncertainty around these loans. We wanted to make it super simple to estimate how much you could get forgiven, given what we currently know from the law itself and the SBA guidance.
dbjacobs 6y ago
Actually the CARES Act states loan forgiveness is not taxable (Act §1106(i)) [1], but also prevents businesses from then taking a deduction for expenses paid with the money (so no double benefit). [1] - https://www.congress.gov/116/bills/hr748/BILLS-116hr748eas.pdf https://www.congress.gov/116/bills/hr748/BILLS-116hr748eas.p...

indymike 6y ago

Nicely done! I really like how clear the UI is. This will clear up a lot of "how do we use the PPP money?" arguments that are going on.

themagician 6y ago

Maybe I'm wrong about this, but the wording on the site makes it seem like those who make over $100,000 are exempt from forgiveness entirely, but it was my understanding that the are covered, just not beyond $100,000. So you can pay someone over the $100k annualized threshold, it just won't add to the amount forgiven. So the single person cap is effectively $16,666 (($100k/12)*2). Am I wrong?

zieski 6y ago
The SBA may release more guidance but as of now payroll costs over $100k are not included in the calculation of the eligible loan amount. They have not been excluded from forgiveness. However, the forgiveness penalties for reductions of more than 25% in wages/salary for employees does not apply to employees making over $100k.

nodesocket 6y ago

If you are self employed and no employees how does the payroll section work? For example, I don't have a fixed payroll. I am setup as a single member LLC (disregarded-entity) and just transfer money from the business checking into my personal checking when appropriate. No formal payroll solution.

hartator 6y ago
Yes, I wonder the sane thing.
tcas 6y ago
From my reading of the interim rules, it's based on your 2019 Schedule C Line 31 (Total Profit and Loss), capped at 100k. For forgiveness it's: ($100,000 / 52 weeks) * 8 weeks = $15,384. The rules and new clarifications seem to change every week, I'd consult a CPA before assuming anything.
- danalt 6y ago
  it's 10 weeks (2.5 months) not 8. Therefore: ($100,000 / 52 weeks) * 10 weeks = $19,230.