Hey there! It's Ben Day (Obviously) - I own Lionshare Bookkeeping.

If you're here right now, it means:

  1. You are a current or past client of ours and you asked about the EIDL or PPP Loans
  2. You are a total stranger and you asked us about EIDL and PPP
  3. You are here totally by accident 🙂

My team is working HARD to keep Lionshare Bookkeeping on track and "business as usual." In order to help them stay focused, I'm running all EIDL and PPP related conversations. In order to keep everyone sane, I created this little web page.

Last Updated: 04/13/2020

Are Real Estate Businesses Ineligible for PPP Loan? 

Even if your business passes as "eligible" for a PPP loan it *might* also need to qualify as not ineligible. According to the Interim Final Rule, top of page 8, businesses and lenders should make sure applicants are not ineligible, which they can do with the SBA's Standard Operating Procedure 50 10. The highlights of that document are below:

SBA SOP 50 10 5(K), Subpart B, Chapter 2 Guidance on Ineligible businesses (please confirm with your lender and your legal representation!) 

"The following businesses are not eligible...

3a. Passive businesses owned by developers and landlords that do not actively use or occupy the assets acquired or improved with the loan proceeds...

3c. Businesses that are primarily engaged in owning or purchasing real estate and leasing it for any purpose are not eligible...

3e. Business that have entered into a management agreement with a third party that gives the management company sole discretion to manage the operations fo the business, including control over the employees, the finances and the bank accounts of the business, with no involvement by the owner(s) of the Applicatn business, are not eligible)

3f. Apartment buildings and mobile home parks are not eligible

3g. Residential facilities that do not provide healthcare and/or medical services are not eligible.

3h. The limited cirucmstances under which certain businesses engage in renting or leasing may be eligible are as follows:

3hi. Hotels, motels, recreational behicle parks, marinas, campgrounds, or similar types of businesses are eligible if more than 50% of the business's revenue for the prior year is derived from transients who stay for 30 days or less at a time and the business complies with all zoning and other legal requirements...

3hii. Businesses that are licensed as nursing homes or assisted living facilities and provide healthcare and/or medical services are eligible"


SBA SOP 50 10 5(K), Subpart B, Chapter 2 Guidance on Eligible Passive Company "EPC" (please confirm with your lender and your legal representation!) 

" Multiple EPCs in one transaction are not permitted"

"an EPC may only use loan proceeds to finance a change of ownership between existing owners when the real estate has been held by the selling owner(s) for at least 36 months"

"The OC must sublease 100% of the property from the EPC, but it can sublease a portion of the property under the rules governing occupancy requirements..."

"An EPC (excluding a trust) may not engage in any business activity other than leasing the property to the OC"

Last Updated: 04/05/2020

What are the Basics of These New Loans? 

Information about the EIDL and PPP loans are changing almost by the hour. None of the information given before or after this statement should be considered legal, tax, or financial advice. Please consult with your tax and legal counsel before taking any action.


ACTION: If you are experiencing Economic Uncertainty, the SBA is encouraging you to apply for the EIDL (link below).

EIDL: Economic Injury Disaster Loan.

  • Apply directly with the SBA here:
  • according to the law, could be offered a 30 year loan with 3.75% interest
  • Could cover things like:
    • Working Capital
    • Payroll, sick leave
    • increased supply costs due to supply chain disruption
    • office rent or mortgage payments
    • repaying debt that can't otherewise be repaid
  • When you apply, you can request a advance/grant of up to $10,000. As of this writing, we have not personally seen any EIDL funds distributed.


PPP: Paycheck Protection Program

  • Apply through an SBA Approved Lender
  • According to law, may not be more than a 10 year, 4% interest mortgage
  • UPDATE: Banks are offering the PPP at a 2 year, 1% interest term
  • Loan can be forgiven (not due back to the bank or the SBA) if YOU can PROVE it was spent on:
    • Payroll Costs
    • Utilities
    • Office Rent
    • Interest on mortgage payments
  • UPDATE: must spend 75% of PPP Loan on Payroll Costs to qualify for forgiveness
  • Funds only forgiven based on spend during the 8 week period after the loan is originated
  • Forgiveness is eliminated based on a decrease of FTE (Full Time Equivalent)

Banks and Lending PPP to Small Businesses

  • The SBA has made it incredibly difficult for banks to lend this money out
    • 1% interest = not a lot of revenue for the bank
    • 1% interest = not a lot of room to hedge risk
    • "Forgiveness" is approved by the SBA but facilitated by the bank
      • SBA has not finalized how the bank should prove that the loan should be forgiven
      • If the SBA introduces final rules on this AFTER the bank lends money, the bank could be liable for those funds
  • As such, most banks are only dealing with:
    • Existing customers
    • Customers with debit and credit accounts
    • Customers that have easily defined and proven "Payroll Costs"
    • Customers that will be able to easily prove how funds were spent, likely with official payroll documentation
  • Applications that cannot easily prove that they qualify will *most likely* be put in a pile and not be processes until the SBA issues further guidance.

Payroll Costs

  • Lots of confusion here 🙂
  • W-2 employees of your business are EASIEST to process
  • Self employed, passthrough income from a Schedule C is more difficult to prove (See section about Banks and Lending for why this is bad)
  • UPDATE: As of the interim final rule, your payments to 1099 contractors do NOT qualify as payroll costs that could help you get approved for the loan.
  • If you are using a Property Management company, the PM company may be able to qualify for the PPP with the W-2 employees they use on your properties.
    • You will probably not be able to use these payroll costs to qualify for the PPP