How do I record the funds received for the EIDL? Looking for specific step by step instructions.

What is "the appropriate asset account"? Is that where the money was deposited when the loan funded? (aka bank account)?

Section 2, step 4: what is the 'appropriate asset account'?

Hello,  I deposited my EIDL loan into a separate checking account that is linked to my regular account.

I will be paying of credit card debt and need to know if I should pay this directly from the EIDL checking or transfer the funds to the regular account and then pay off.   These vendor bills are listed in accounts

payable and am not sure how to handle this if I have a new checking account. I want to make sure that it is very clear how the money is being used when I present the info to the SBA.   Thank you for in advance for your suggestions.

rms

Thank you for getting back here in the Community, @Framing1975.

Yes, since there is a new checking account that is created for the loan, you can select that when you're about to record the payment. 

Here's how to record a loan payment:

1. Go to the New button and select Expense.
2. In the Payee field, enter the business or person you received the loan from.
3. Select the bank account holding the loan you'll use to make payments from the Payment account drop-down.
4. Enter the Payment date and select the Payment method from the drop-down.
5. You can use the Ref no. field to enter any identifying number from the payment receipt. This is optional.

You'll need to enter the payment, interest, and bank fees as separate line items in the Category Details section.

To enter the loan payment:

1. Pick the first line.
2. From the Category drop-down, select the account you used to track this loan.
3. Enter the total amount of the loan payment in the Amount field.

For more information, please refer to this article link: Make a loan payment in QuickBooks Online. 

I've also attached here a helpful article that can help you in managing your loans in QuickBooks Online: Loan in QuickBooks Online. 

If there's anything else I can help with, feel free to post down below. Take care always and have a good one. 

I recorded the EIDL loan according your steps. But QB online automate made anther Journal entry. Debit the loan amount to Loan account, and Credit the loan amount to Opening Balance Equity. This made the long term liability account zero.  Does this is correct? 

Hi - I've been struggling with this too, and going round and round with QBO support. No guarantee this is correct - but I think it is:

Delete the entry generated by bringing in the deposit from your bank in the chart of account loan account.

Open the journal entry made in the chart of account and click 'EDIT'

  Line 1. I had a GROSS amount of the loan (example $1,000.00) entered as a CREDIT.

  Line 2. The deposit from the bank was a NET amount (example $900.00) entered as a DEBIT.

  Line 3. The UCC filing fee the SBA deducted (example $100.00) entered as a DEBIT.

I now have a $900 deposit in my checking account.

An expense of $100 for the UCC Filing fee

A chart of account loan showing $1,000.

I'd love any feedback if anyone knows this is correct or not.

Thanks - Pam

Do you know if there are instructions on how to record this and the PPP loan in Quickbooks Desktop.  The only detailed instructions I can find are for QBO.  For instance in Desktop there is no drop down for Detail Type and there is no place to enter the loan amount when creating the new item.  This amount does populate when I go into my checking account register and change the From Account in the deposit to the new Liability Account I created for the loan.  Also I don't understand the purpose of the JE. Can you explain that?

I also have received EIDL funds and have followed the steps you outlined.  My question now is what should the Balance sheet and chart of accounts look like?  The loan is not showing as a liability on my balance sheet but instead shows as $0.  Also, on the chart of accounts, the loan shows as $0 and Opening Balance Equity shows the loan amount.  Is this correct? We have not spent any of the funds yet.  We have only received funding for the loan.

Good Afternoon, @sdalton. 

I hope your day is going well so far. To properly assist you, can you provide some screenshots of the report and the loan in the chart of accounts? This will allow me to determine the best solution for your business. 

In the meantime, you can consult with your accountant to look over the information that was put into QuickBooks Online. If you don't have an accountant, check out this link to find one near you. 

Here are a few articles that may come in handy based on this situation: 

• Paycheck Protection Program loan forgiveness

• How does an EIDL advance affect my PPP loan?

• Set up a loan in QuickBooks Online

I want to make sure you get this resolved as soon as possible. I'll be waiting for your response!

Our Nonprofit got a $150K EIDL loan that was just deposited to our "Base" Bank account by the SBA.  Here are the steps that I took to record it in QB 2019 Premier Desktop Nonprofit version:

1) Called our bank and got a new bank account setup for the EIDL funds.

2) Transferred the $149,900 that came from the SBA (minus the $100 UCC filing fee) into the new bank account.

3) In QuickBooks, created a new Bank account for that EIDL funds account.

4) Created a new Long Term Liabilities account for that loan.

5) Created a new Expense account for the loan repayments (they won't start for 1 year, but I wanted that ready to go now).

6) Created a new Vendor account for the SBA who made the EIDL loan.

7) Made a Bank Deposit in QB as shown in the attached screen capture:

- "Received from" is the SBA EIDL vendor

- "From Account" is the EIDL Loan account (Long-Term Liabilities)

- "Memo" is "EIDL Loan Deposit from SBA" or words to that effect

- "PMT Method" is EFT or whatever you want to use

- "Class" (we're a nonprofit) is Restricted Income - but could be a special Class setup for EIDL funds

- "Amount" is $150,000.00

Then add a second line for the UCC Filing fee:

- "Received from" is the SBA EIDL vendor again

- "From Account" is the Finance Charges account that you probably already have setup for other finance charges

- "Memo" is "UCC filing fee by SBA"

- "PMT Method" is EFT or whatever you want to use

- "Class" is Administrative Expenses (or a special class for EIDL-paid expenses)

- "Amount" is -$100 (a negative amount!)

That leaves a net deposit of $149,900 - the amount that was actually deposited from the EIDL loan.

Now our balance sheet shows a new bank account with $149,900 in it and a new Long-Term Liabilities account with a $150,000 balance.

Cheers,

David G.

One correction: I made the initial bank deposit in QB to our "Base" account where the SBA put the EIDL funds first, then did a Bank Transfer over to the new EIDL Funds bank account where I moved the money to.  That keeps QB in sync with the bank transactions.

David G.

In QB online, I do not see an "Amount" field to input the negative amount. The instructions are listed below.

1.  
2. Add a recognizable name like EIDL loan, then enter the full loan amount as a negative amount in the Amount field since the future payments to the bank are a liability for your business.

In QB online I do not see an "Amount" field to input the negative amount. Where do I input this information? Below is the instructions for this ...

1. Add a recognizable name like EIDL loan, then enter the full loan amount as a negative amount in the Amount field since the future payments to the bank are a liability for your business.

I'm here to help you enter the negative amount, inquiries2.

Before adding the amount, you'll have to select when do you want to start tracking your finances from the EIDL account.  Here are the complete steps:

1. From the Accounting menu, select Chart of Accounts.
2. Click the New button.
3. From the Account Type drop-down list, select whether it's a Long Term Liabilities if you plan to pay off the loan by the end of the current fiscal year or Other Current Liabilities instead if it's payable in a short period.
4. Choose details that match your loan in the Detail Type drop-down menu.
5. Enter a recognizable name.
6. Under When do you want to start tracking your finances from this account in QuickBooks?, select the correct period.
7. You can customize the date by selecting Other, then choose the correct dates.
8. Add the full loan amount as a  negative amount in the Amount field.
9. Click Save and close.

For your visual reference, I've attached some screenshots below.

Once done, you can now create a journal entry.

When your ready to pay back the loan, I suggest visiting this article, then scroll down to Step 3 for the detailed process: Set up a loan in QuickBooks Online.

Please get back to me if you have other questions about the process. I'm always here to assist you.

Charlene, I know this is about 6 months later but the problem still exists. I received a $2500 loan from the city. I create my long term liabity with a negative $2500 starting balance. After I enter my journal entry (showing a credit from the city and a debit to the account where the funds were deposited) it leaves my Long Term Liability at $0. Is this right? Seems wrong.

Hi @BTOWNMN. Thanks for joining the thread and sharing the details about how you record the loan.

You're doing the right thing when entering your journal entry (JE) to show the credit from the city and a debit to the account directly. This transaction will negate the long-term liability when you paid it in full when it has a balance.

However, if the long-term liability has no balance, you won't have to enter a negative amount. Then make sure to create the JE to credit Liability then debit the Bank account. This will increase the balance of the liability when receiving the loan. Feel free to check the screenshots below:

This will create an amount in the loan account, so when it's time to repay it, you can then add a check to negate or 0 out the amount.

This will be what it looks like in the loan account register:

I've also attached a helpful article that can guide you in managing your loans in QuickBooks Online: Loan in QuickBooks Online.

If you're doubtful about the proper account to use, I'd suggest consulting an accountant for professional advice to keep your books are accurate.

Let me know if you have additional questions or concerns about creating a loan. I'll keep my notifications open to help you. Take care and have a great weekend!

Thanks for this. I think I understand where I went wrong. Using the link you provided for Loans in Quickbook, the negative balance is only is only if you created the limited liability after receiving the loan (step #7). If entering a negative balance there is no need for the journal entry crediting the loan principle and debiting to the deposit account?