Hi Zig Forums wanted to share a loophole I found with the PPP program. (Paycheck protection program)
1) Identify company currently in bankruptcy that had payroll in 2019 (preferably a Chapter 7) 2) Contact trustee about acquiring just the membership/stock interest in the LLC/corporation (no assets except books and records) 3) Purchase entity for a few thousand dollars - an entity in this status has zero inherent value since its underwater with debt so it shouldn’t be a lot 4) Apply for and secure PPP funding 5) Put yourself and your family on payroll at $100k/yr - nothing in the SOP requires you to hire people who worked for the company before back to be eligible for forgiveness. 6) If total $ eligibility exceeds what you can spend over 24 weeks at $100k/head with your family, hire your friends or some shit.
It’s pretty self explanatory. Buying the entity means you own it. Since you own it, you can use prior year numbers to apply and get monies
Samuel Russell
Nice. Good job mate
Sebastian Wright
sounds like the kind of thing only allowed for jews, godspeed op
Jackson Gray
holy kek. i would do this but i would get sued probably with some obscure law. you sure this is legal? kek
Xavier Harris
also is that your loan? if so then mega kek
Oliver Wood
Plenty of such loopholes exists. Find yourself a good jewish CPA. Only wagies pay taxes.
Luke Hughes
Yeah I got my law firm to write an opinion letter saying it’s permissible. Contact at the SBA even said it’s allowed, only rule is you use the $ for payroll so, lol.
Yes, this is
Jace Morris
holy my jesus of mother kek i love you. 1. gov said they're doing detailed reviews of loans of above 2 million. so you're saying that they're going to review your loan, see that you acquired the company a few weeks ago, see that everyone on the payroll is all your family and friends, and not suspect a thing? KEK no way i can't believe the government would allow this clown world shit 2. this is not fraud? check this article. forbes.com/sites/brucebrumberg/2020/04/10/how-to-avoid-going-to-prison-for-your-paycheck-protection-program-loan-advice-from-former-federal-prosecutors/ you sure it will pass points #3, #5, #7 (first list)? i could see you going to jail just to set an example for the government, kek but i don't know too much about any of this. 3. i didn't research the PPP program but how does it work? when you got the 10 million dollar loan, at the end, how much of it are you actually going to get?
Jace Green
4. also can you do this multiple times
Charles Martin
>Yeah I got my law firm to write an opinion letter saying it’s permissible. sure you did
it's illegal to sell a business during a chapter 7 or 11 bankruptcy without the permission of the trustee. They don't give that permission because it's illegal.
Jayden Cooper
>it's illegal. there are 2 legal barriers-
1. the sale would have to be approved by both the trustee and the pool of creditors 2. bankruptcy nullifies any existing contractual obligations, including the legal obligation to transfer the company to you.
a company in bankruptcy can't legally enter into new contracts. And usually has to void all old ones.
Julian Richardson
My firm has 700+ lawyers and charges $700+/hr. I got a competent firm for this particular opinion letter. The trustee drafted the sale order - they can sell the membership interest/stock out of a bankruptcy sale with the trustee and judges approval.
This particular one I’m going to use the funds to hire more people to work for some of my other businesses. Obviously the $10M vs $200k loans will be different. I’m in a different position because I could use the $10M to hire other staff.
It’ll pass #3 because I can show all the dollars went to payroll from a single account.
How much do I get? I can only pay myself $100K/yr but the upside for me is in increased revenue in my other companies, people I can hire with the $10M subsidy from the entity I bought from the BK estate.
Yes you can do it multiple times up to an aggregate $10M.
Mason Davis
Trustees haven’t had any opposition to the sale order because in Chapter 7 bankruptcies, usually, nobody is bidding for the corporate shells.
#2 is moot and you’re retarded, there’s no obligation for them to transfer it to me, but the trustee can file a sale order and the judge can approve it, thus transferring ownership of said entity out of the bankruptcy estate.
Jaxson Lee
>they can sell the membership interest/stock out of a bankruptcy sale with the trustee and judges approval. yes, but the sale can't go through DURING the bk. It waits for adjudication.
The problem you'll run into is SBA loans require a DUNS #. D&B are going to report the bk and sale to the SBA usually within 30 days.
so you use the existing DUNS and you have about 30 days before you go to jail, or you request a new DUNS and don't get the loan.
Ryder Sanders
DUNS has nothing to do with this. You use the EIN.
The corporate shell is technically an asset that can be sold in the bankruptcy process. Just like a desk, or a stove, or whatever else.
Hunter Wright
>DUNS has nothing to do with this. I see you've never dealt with the SBA
Nathan White
I’ve secured several 7a loans before for various businesses, as well as PPP for said existing businesses. I’m pretty sure I know what I’m talking about
Adrian King
Just goes to show how stupid this shit all is.
Aiden Cooper
you don't seem to know that the EIN is used only for verifying last year's taxes and there's absolutely no reason the SBA or any affiliate bank WON'T pull the company's credit report.
are you high or just larping? Of course they pull a credit report.
Matthew Watson
THEY DONT DO ALL THAT SHIT FOR PPP. You’re missing the entire point of this post, it’s not about regular 7(a) or 504. It’s basically snagging payroll grants from buying defunct entities that had qualifying payroll.
Adrian Reed
>THEY DONT DO ALL THAT SHIT FOR PPP they don't bother with a 5 second request but demand days worth of payroll and earnings documentation?
sure kid.
Nathaniel Morales
Have you gotten any PPP dollars for any of your businesses? Have you seen the applications? Where does it ask for the DUNS number?
Wyatt Rogers
kek this is amazing. few more qs for you 1. you can use the money from the loan to help pay for payroll for your other companies and not help the business entity that the loan was intended for? how the fuck is this legal? 2. if you got sued i have no clue how'd you be found not guilty for all of this. unless the writing of the ppp law was extremely shit 3. why would the gov approve a 10M loan to a business in bankruptcy? 4. do you have any more /almostfraud/ business tips?
Ethan Ward
oh lord
D&B lists companies by name and location. You don't even need a DUNS number to be in their database. If you have a business you probably already have a DUNS and don't know it. All they need is your business name and your credit application to pull your credit report.
Cooper Nelson
You put people on payroll of the entity that you secured the PPP funding for, the nature of their job function is irrelevant.
The writing wasn’t shit; it just didn’t contemplate an opportunistic person such as myself identifying this loophole
Because as of the date of the application, the entity wasn’t in bankruptcy because I bought it, and the government doesn’t approve shit, it’s all administrated by banks.
Jaxson Brooks
Why does this change anything? When you submit a PPP app to a lender, they only enter the EIN, the borrowers SSN/DOB and a dollar amt into E-Tran. The approval process for a PPP app isn’t the same as a 7a, you keep bringing up irrelevant points.
Oliver Fisher
>legal peepee poophole
Jonathan Hall
>Why does this change anything? because you're applying for payroll that doesn't exist, which means you're lying on your application. This is fraud.
Leo Nelson
But it does exist since hes adding his family and friends
Xavier Gomez
Question 38 on the FAQ, read it closely. You can rely on historical payroll figures.
Matthew Stewart
yes, but the bank wants to see that it existed for some span of time before the loan application.
the user is telling the truth about how long the corporate name was in use, but would have to lie about how long he's owned and administered it.
it's no different from starting a new business just to apply for ppp loans/grants. The only difference is he's lying about how new the business is. Or lying about its financial viability. Or lying about its existing payroll. Or all of the above.
Mason Cooper
>You can rely on historical payroll figures. yep, in the history of you owning the company.
new owner, new payroll history.
Noah Davis
Everyone laugh at this faggot who’s going to be in jail. Your greed has blindsided you into believing you’ll be able to get away with any of this. Kek
He'll easily get away with it for a while, the ppp is a clusterfuck
eventually someone is going to go back and audit the program though, and OP will very likely go to prison.
Jose Clark
All the dollars are going towards payroll, I’ve already engaged an accounting firm to make sure every penny is accounted for. I’ve even consulted with the SBA about the particulars of this structure and they agreed it’s permissible.
Andrew Richardson
>If the acquiring business has maintained the operations of the pre-sale business
this is the part you're conveniently ignoring. You have to have made historic payroll and earnings out of your own pocket between the purchase date and loan application.
Blake Ross
You don’t have to list out how long you’ve owned an entity for a PPP app, just that you own it, and you provide historical payroll info which is usable for calculation purposes, per the Q38 FAQ
Juan Davis
>You don’t have to list out how long you’ve owned an entity for a PPP ap because that info is in the credit report they pull for every single ap
Josiah Ortiz
Enjoy being assfucked in prison kek
Liam Rodriguez
Where does PPP require a credit pull? *facepalm*
Do you actually have businesses that secured any sba money? I had a couple that got PPP even before I realized this whole thing was an option.
No, that’s not accurate, nowhere does it say that.
Alexander Wood
>per the Q38 FAQ again, you have to operate the business out of your own pocket between buying it and getting the loan, or the data can't be used.
there's also the problem that a business in bankruptcy probably has historic data of no payroll and no earnings at the time you bought it. So again, fraud.
Benjamin Diaz
>Where does PPP require a credit pull? that's the truly funny part of all this.
you think banks are lending millions of dollars to businesses without pulling a credit report.
Jace Martin
You use the 2019 numbers for payroll for PPP request calculations. Not fraud, I had the SBA look at the EXACT structure of one of these acquisitions and they verified I was right.
A company that filed BK in say, May 2020, definitely had 2019 payroll. Not sure why that’s hard to fathom.
Sebastian Gray
>nowhere does it say that. literally a quote from the page you posted
Josiah Cook
>You use the 2019 numbers for payroll for PPP request calculations. except you have to prove the numbers havent changed.
Ethan Taylor
It just says you have to “maintain operations” not that you have to cut a payroll between buying it and pulling a PPP request.
