SBA Loans for US Hosts

[Lee447]

In Brian's talk this week, he mentioned that Airbnb has "worked together to secure support for hosts in the US Government’s recent COVID-19 Stimulus Bill. This legislation now allows for US hosts to take advantage of many relief measures, including small business grants, small business loans, and unemployment assistance." 

I have not incorporated my Airbnb, but I am curious if we can apply as sole proprietors? Now that the application is out I am wondering if anyone is pursuing this path or has more information. 

@Lizzie is Airbnb planning on sharing any more resources about this process?

[Adam-and-Ike-0]

@Lee47 -- glad it's helpful.

But this info above is just for the COVID Injury Disaster Loan, so there's not a bank involved with the process that you need to get approval from. (You need to go through a bank for the PPP part of the CARE Act, but this is separate, even though it also involves the SBA.)

For the Disaster Loan through the SBA you just fill out the application through the SBA website. Here's the application: https://covid19relief.sba.gov/#/

[Timothy289]

@Adam-and-Ike-0 Any idea if W2 wages are required for the Disaster Loan? I am a sole proprietor that claims rental income from Airbnb but I don’t necessarily pay myself through payroll. My understanding is I can apply for Disaster Loan but not PPP. Any input? Thanks!

[Adam-and-Ike-0]

@Timothy289 -- Not sure if W2 wages are required, but sole proprietor is one of the first options you can select on the application for the Disaster Loan. The impression I got from the SBA rep yesterday was that they are allowing a pretty 'broad stroke of the brush' to help people out, if that makes sense. There is no harm in applying because even if you get approved for the loan you can still decline it.

In terms of the PPP, you'd need to call your bank to ask them, but they should be able to let you know either way.

[Rae-And-Stephen0]

My understanding is Airbnb hosts generally SHOULD be eligible for both PPP and Disaster loans. However we keep a separate business checking account and then "pay" ourselves via transfer to personal checking so that makes it easier to show a form of payroll than otherwise.

We just filled out our PPP application and I am including the following links within an attachment to the application in case the lender questions eligibility:

https://www.airbnb.com/d/host-message

("We have worked together to secure support for hosts in the US Government’s recent COVID-19 Stimulus Bill. This legislation now allows for US hosts to take advantage of many relief measures, including small business grants, small business loans, and unemployment assistance. A huge thank you for the more than 105,000 calls and emails you made to members of Congress.")

and: https://www.nbcnews.com/health/health-news/blog/2020-03-25-coronavirus-news-n1168156/ncrd1169086#blo...

("Airbnb hosts can get small business loans through federal relief bill
Airbnb hosts will be eligible to receive small business loans and unemployment insurance through the coronavirus relief bill.

"We are deeply appreciative of bipartisan Senate and House leadership for recognizing there is a new sector of the workforce who depend on Airbnb for their monthly economic needs,” said Chris Lehane, Airbnb’s vice president of policy and communications.

The bill, as it is currently written, requires eligible borrowers to show that they need the loan because of the uncertainty of the economic crisis caused by the virus. The loan can only be used to maintain payroll, leases and utility payments.")

Hope this is helpful (and hope it works!)

[Rae-And-Stephen0]

Update - our bank denied our PPP application. They said that is because we were using Schedule E instead of Schedule C. They said it's possible those references in the articles above are assuming hosts use Schedule C, or only applying to the disaster relief program. I don't know. Its a crapshoot.

[Stephan-And-Skye0]

I applied for the EIDL loan over a week ago and sadly have never heard back from them.  Not even an email.  All I got was a confirmation number.  EIDL loans come directly from the SBA.  According to the news articles, I have read they are super bogged down and only focusing on businesses with employees.  I have also read that the money for this program is almost already gone!  😞

Be aware ... the EIDL loan promised a $10,000 grant ... however, with more research ... that grant is only if you have employees!  $1,000 per employee!  So the best you are going to get as an Airbnb host from the SBA through EIDL (if they ever get to you) is a loan for $20,000 at 3.75% with no cash advance!  This program really is not going to help hosts.  You'd be better off refinancing or using a HELOC to weather this storm.  

If anyone has had better success with EIDL loan application I'd love to hear what you did!  

[Michelle53]

EIDL never guaranteed $10,000. It always said an advance of up to $10,000 may be requested. 

"This loan advance will provide up to $10,000 of economic relief to businesses that are currently experiencing temporary difficulties."

"Funds will be made available following a successful application. "

https://www.sba.gov/funding-programs/loans/coronavirus-relief-options

A bulletin dated April 6th apparently started limiting the amount of the advance further, due to the large number of applications for the program. 

[Stephan-And-Skye0]

Never mind ... I take it all back.  I did receive the $1000 EIDL grant this week!  It just showed up in my bank account.  I haven't received any other documentation or the loan invite but the grant money is there!  Just thought I would update you all on this who were wondering.  

[Rae-And-Stephen0]

I found an SBA handout on  the program (which I was unable to locate now when Googling) that said for service industries, cost of goods sold would be replaced by cost of service, essentially the operating expenses. It said the maximum loan amount is intended to be 6 months of expenses to the extent they cannot be covered due to coronavirus. So I think you do need some COGS otherwise there aren't any expenses for the loan to go towards. But the lack of guidance the SBA has on their site is mind-boggling.

[Michelle53]

Cost of Goods is NOT general operating expenses. It is the direct cost of delivering the service. 

Example:  In a construction project, the Cost of Goods would be any materials purchased (e.g. flooring, roofing, tiles)  or labor  (roofers, tilers, carpenters) used for that project.    

In a hosting situation, Cost of Goods (or Cost of Services) are items related directly to the booking itself. e.g. cleaning services,   airbnb service fees,  laundry for that booking,  etc. 

Any of a host's indirect expenses, such as monthly rent, utilities, etc are not Cost of Goods/Service. 

[Troy52]

I hope you got the information you needed in time to apply.  I applied from both the PPP loan and the SBA Economic Injury Disaster Loan.  I applied for the PPP loan through Chase, because I have my business accounts with them.  They denied my PPP loan because I do not have employees.  I run my Airbnb as an S-corp so I did not qualify for the PPP loan.  If you claim you AirBNB income on Schedule C of a 1040, then you maybe eligible for the PPP loan.  I did recieve a $1,000 grant from the SBA and I was just approved for a EIDL for $2,900 that I don't have to start paying back for 12 months and when I do have to start paying it back it will be at $15 per month.

I put "AirBnB" as the business activity.  I put zero for cost of goods sold.

[Timothy289]

@Troy52 i also got the $1,000 grant from EIDL but how did you apply for the extra $2,900? I didn’t receive any information on how to do this. Thanks!

[Troy52]

I didn't do anything extra.  I applied for the loan orginally before the option for the grant was added.  I just put in all my information and agreed to have them pull my tax returns.  They pulled my personal credit on around 4/17 and I was sent an email around 5/14 with access to a portal that had the amount of $2,900 as the amount of fund I was eligible to request.  It was a slider so I could have requested less.  I'm not sure how they came up with that amount.  I agreed to the $2,900 then they emailed closing documents for me to electronically sign.  The funds were deposited into my account today. 

[Deva0]

The $1000 was the EIDL advance, hich is forgiven. The second amount is the EIDL loan.

[Apollo16]

Hi Guys ,

Thank you all so far for your replies its been very helpful, 

I am the 2nd round of my SBA loan for reconsideration .

They are asking me for the following document: 

• Rental Income Statement that includes: rental property address, pre-disaster rental income and post-disaster rental income.

My last year's summary ONLY include's the airbnb address not my property's address.

Also i don't have a summary of after disaster 

Do i need to hire somebody?

Any lights how i should go about it. 

Thank you