PPP problems

Lynda60
Level 2
North Kingstown, RI

PPP problems

There's a big problem with Airbnb hosts being denied PPP loans on the basis that no Airbnb host qualifies. Both the state SBA and the National SBA said airbnb is not included for PPP loans, and I don't believe this to be correct. In fact it's my understanding Airbnb specifically participated in dial-up with Congress when the bill was being crafted to include Airbnb hosts for benefits under the ACT including PPP loans. We need to take some kind of immediate definitive action like get a hold of the CEO of Airbnb, otherwise we will all lose out.

9 Replies 9

I am not an expert on this!  But I have gone through the entire process.  This is what I learned:  

 

Sadly I think there was a lot of confusion with PPP and EIDL.  Most people tried going the PPP route when they should have gone with EIDL.  

 

PPP was for businesses with employees who would get funds to spend primarily on employee wages.  The businesses needed to be official businesses, with business tax returns, evidence of payroll, association with SBA approved banks, and so on. Most of us mom and pop Airbnb hosts don't really have employees nor do we have evidence of payroll through an SBA approved bank.  In fact, many of us may not even have a schedule C.  I'm guessing most hosts just use schedule E!

 

Instead, mom and pop Airbnb hosts should have turned to EIDL.  With that program, you still got the $1000 grant (same as the PPP) and an option to get a non-collateralized loan at 3.75% for 30 years.  I had success signing up with EIDL.  I was only asked to provide my schedule E and my Airbnb 1099k.  

 

I wish all of this information would have been better delivered both by the government and Airbnb!  The issue is that Airbnb serves two types of hosts: 1) mom and pop hosts and 2) big enterprises with hundreds/thousands of listings.  For the latter, PPP was good for them.  For the rest, EIDL was better. I apologize that you never got help through these programs. 

Thats good info @Stephan-And-Skye0 , thank you.  I was told about it from our SBA, they actually said I would qualify for either but I needed a 2019 completed tax form to prove I was in business this year.  Im not filing until I have to in July like many others.  One question, I think they told me the $1000 grant was part of that EIDL and even went as far as saying if you get the check and pay it back that day, you get the grant and owe them next to nothing.  Makes it worth while all by itself and skip the loan payback system al together.   JR

@Stephan-And-Skye0 Exceptional helpful post.

Lynda60
Level 2
North Kingstown, RI

Thank you for your reply! I think you're exactly correct, it would have been much easier had I tried for an emergency loan but by the time I realized I could, the emergency loans were already out of money.  Although I understand what you're saying about PPP loans they are also supposed to be for people who are self-employed, and should be able to be used to compensate someone who's running a business alone and has lost their income. Although I have filed schedule C in the past, I did file schedule E this year this year and I think most Airbnb hosts do file a schedule E but that shouldn't prevent us from getting a PPP loan.  gig workers were specifically discussed when the cares Act was passed and in fact the CEO of Airbnb, made sure to insist that host were included in language for PPP loans so I don't know how it ended up this way. There's still 156 billion dollars in the PPP fund, probably because of difficulty and some businesses even getting a ppp loan because of the way the SBA is interpreting the ACT.  

Very unfortunate and very unfair!

Lynda60
Level 2
North Kingstown, RI

I've decided to amend my tax return and file schedule c. As you know Airbnb is not a passive business, if you host, it's an active job with many hours of cleaning, purchasing supplies, changing linens, repairing the property, meeting the guests and explaining the property, not to mention all of the work involved in moving out of my home for every rental! I think your accountant is incorrect and you should not be filing a schedule e. Schedule E is for passive real estate income, Airbnb hosting is not a passive activity.  I hope it works.

Lisa723
Level 10
Quilcene, WA

@Lynda60 @Fred13 @Melodie-And-John0 @Stephan-And-Skye0 

 

FWIW: We got both PPP and EIDL loans. We have no employees but do have independent contractor (1099) help. We have 4 listings for 2 properties and are incorporated as an LLP.

Good stuff @Lisa723 , excellent education for those (like me) that have no clue how this all works and means.

Did you file a schedule C and, if so, why? I believe IRS rules require hosts to file a schedule e. I believe this misunderstands our role. Nevertheless, it's so. Any suggestions if I file a schedule E?

Inna22
Level 10
Chicago, IL

I filed and received PPP but I pay myself salary and payroll taxes on it. I have an S-corp. I would have made more going on unemployment but that is a whole other story (and an option available to many)