Does that mean every year weve got to send the SBA our financial records even if were not being audited? Press question mark to learn the rest of the keyboard shortcuts. If you were approved for an EIDL targeted loan advance but havent received it yet, the SBA is actively re-disbursing those funds. Copyright 2003 - 2023, Small Business Trends LLC. %%EOF They are applicable only to COVID EIDL loans made through December 31, 2021. Easier borrower qualifications that help you build business credit. I'm assuming this is most likely retro pay dating back to 10/18/2018. Use r/TargetedEIDL for advance/grant issues. Most small businesses have elected to be taxed as S corporations. SBA audit for EIDL Anyone have any experience with these loans, how often will SBA ask for 5 years of back book keeping, audits, etc. If an S corporation pays out dividends, however, they are not required to pay employment taxes on these, although the law does require that reasonable wages be paid to owners. Notify me of followup comments via e-mail. There are two parts to the EIDL program: loans and grants. It is a typical practice for many small businesses to take out dividends, but now it is illegal for those who have received EIDL loans. which is written into the loan docs. %PDF-1.6 % We have mortgages, car payments, school tuitions, and other personal expenses that have to be paid, and soon. We are glad to hear that the SBA has been busy notifying loan applications that their Economic Injury Relief and Disaster Loan (EIDL) has been approved. Until the EIDL loan is paid back, owners cannot take distributions or dividends from their practice. So if you cannot collateralize a large part of the loan amount, there's a good chance that your application will be rejected. Your email address will not be published. Check with SBA disaster customer service if you have a question about the status of your loan.. EIDL Advance FAQ; Paycheck Protection Program FAQ; COVID-19 FAQ; What is an Economic Injury Disaster Loan? Members cannot receive more than that. But that computation is tricky, as it has to be considered reasonable compensation for services youre currently rendering to your business. Keep in mind that single audits are only required when a nonprofit expends greater than $750,000 of total federal financial assistance during their fiscal year. This is probably the biggest criminal exposure for EIDL borrowers. Usually, when people think of a COVID stimulus program with a forgiveness process, theyre thinking of the Paycheck Protection Program (PPP). Many banks are already taking steps to get businesses of certain sizes and nature off of their books, especially if there is an issue with a borrowers PPP loan status, and whistleblowing employees and others may receive bounties for turning in unassuming employer borrowers who might not even be aware of the issues at hand. As of mid-October 2020, the U.S. Small Business Administration (SBA) has approved 3,612,236 Economic Injury Disaster Loans (EIDL) totaling $191,994,805,796.
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