Covid-19 EIDL to LLC

Deadeye1985 · ‎December 07, 2024

Here's the story.

Small consulting LLC receives an SBA Covid-19 EIDL for $113700. Entire amount is received into Biz account and $80K is moved into dedicated bank account and remainder is left in Biz account. During Covid-19 slowdowns 2020 to 2024 EIDL money used to pay LLC expenses.

How should loan have been received into business QB? Long Term Liability or What?

OK, out of the $80K that was deposited into the dedicated EIDL funds account the LLC took draws equal to the amount the business received as monthly revenue from client being serviced before Covid-19 shut down and the remaining $33,700.00 was used during the intervening years for other periods of Covid-19 related stoppage of business.

Now I have a problem as the loan supported the business for a 7 month period so that the available money exceeded the revenue the business received and it is now showing as a "Loan to Member" as a mechanism to balance the books and the LLC may be forced to close it's doors and close due a further lack of business from actions taken by the current Administration and economic factors.

I have made contributions to the LLC through the years whenever extra capital was available to do so. Is there any way to show these influxes so that they offset the Loan to Member that never really happened?

I am using QB Enterprise Solutions Desktop 23.0

Mudbug61

Rainflurry

@Deadeye1985

"How should loan have been received into business QB? Long Term Liability or What?"

Yes, the total of the EIDL ($113,700) should have been recorded as a long-term liability. It should still be on your balance sheet that way unless it has been repaid.

"I have made contributions to the LLC through the years whenever extra capital was available to do so. Is there any way to show these influxes so that they offset the Loan to Member that never really happened?"

What do you mean the 'Loan to Member' never really happened? Isn't that the account that was used to record the cash that was taken out of the business to pay yourself as a result of the drop in business related to COVID? The Loan to Member asset account may be able to be offset if you have adequate tax basis to cover it. Is the LLC a single-member LLC or is it taxed as an S-Corp or ???

Deadeye1985

Rainflurry,

Your thoughts in relation to EIDL loans, if the Borrower of record (as noted on the SBA loan documents) is the LLC borrowing the funds that are disbursed upon approval of the SBA, and no personal guarantee exists, how is this handled should a default occur and the charged off amount is sent to the Treasury (TOPs) for further collection activities? Do their collection actions take place against the Borrower (assuming the EIN is the identifying method used to denote the borrower) like impacts to credit reports and garnishments like tax refunds and SS payments? What about the managers/members, can they expect action against them, or will it just be coming from these agencies and directed towards the LLC? Thanks.

Deadeye

Rainflurry

@Deadeye1985

Sorry, I wish I could help. That's way outside my area of competence.

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Covid-19 EIDL to LLC