By: Todd Schanel, CFA, CPA, CFP®
on April 17, 2020

CARES Act-Paycheck Protection Program-Small Business Loans-SBAAs described in previous blog posts, the CARES Act provided relief to small businesses in the form of two loan programs: the Paycheck Protection Program (PPP) and an enhanced Economic Injury Disaster Loans (EIDLs).  Here is the latest news on each program.

EIDL Grants Limited to $1,000 per Employee

Perhaps the most striking enhancement to the EIDL program that resulted from the CARES Act was the addition of a loan advance of up to $10,000 that would not have to be repaid.  However, there was no guidance on how the amount of a grant would be determined.

This week, EIDL applicants received an email from the SBA with the following language:

To ensure that the greatest number of applicants can receive assistance during this challenging time, the amount of your Advance will be determined by the number of your pre-disaster (i.e., as of January 31, 2020) employees. The Advance will provide $1,000 per employee up to a maximum of $10,000.

Furthermore, as of today, we have not heard of any reporting or anecdotal evidence that anyone has received an EIDL loan or loan advance.

Sole Proprietors Are Eligible for Loan Forgiveness Under PPP Based on 2019 Net Income

Sole proprietors and independent contractors are eligible for PPP based on their 2019 self- employment income. However, it was not clear how a sole proprietor would qualify for loan forgiveness if there was no self-employment income during the 8- week period following the receipt of the loan proceeds.

This week, the SBA finally issued guidance on this issue. When determining forgiveness for a self-employed taxpayer, the lender will forgive 15.38% (8/52) of 2019 net self-employment income.

However, it is still unclear if a sole proprietor will also be eligible for loan forgiveness for non-payroll costs, such as rent and utilities. The SBA guidance provides conflicting information on that issue. My guess is those expenditures will be eligible for forgiveness.

As more information becomes available, we will keep you informed.


Schanel & Associates is a CPA firm specializing in accounting, tax, business valuation and litigation support serving Palm Beach, Martin and St. Lucie Counties and beyond since 1993. Our CPAs and accounting professionals work with individuals, businesses, estates and trusts to provide everything you need under one roof. For more information, contact us today at 561-624-2118.
Todd Schanel has been a principal at Schanel & Associates since 2004, where he specializes in financial planning, tax planning and consulting services. He also serves as Founding Principal and Director of Investment Advisory Services at Core Wealth Management, our sister company, where he leads an accomplished professional team offering independent and objective financial advice to help clients achieve their financial goals. Todd has been a CFA Charterholder since 2005, and in 2007 he earned his Certified Financial Planner® designation and became a licensed CPA. In 2015, he earned the Certified Valuation Analyst (CVA) designation.

Schanel & Associates is a CPA firm specializing in accounting, tax, and business valuation serving Palm Beach, Martin and St. Lucie Counties and beyond since 1993. Our CPAs and accounting professionals work with individuals, businesses, estates and trusts to provide everything you need under one roof. For more information, contact us today at 561-624-2118.