The Small Business Administration (SBA) established the Economic Injury Disaster Loan (EIDL) program to give small businesses damaged by catastrophes financial support. EIDL loans are now more crucial than ever for small business owners that require help to maintain their operations in the wake of the COVID-19 outbreak. The essential paperwork for EIDL loans will be covered in this post, along with some FAQs relating to these loans. Documentation for EIDL Loans is Needed.
For the SBA to process EIDL loan applications, specific documentation is needed. The following records are necessary: Business loan application (SBA Form 5), economic injury disaster loan supporting documentation (SBA Form 1368), tax information authorization (IRS Form 4506-T), personal financial statement (SBA Form 413), schedule of liabilities (SBA Form 2202), and tax information authorization (SBA Form 1368) are the five required documents.
6. Gross Revenue Report for the 12 months preceding the disaster (or for the most recent fiscal year if the company has not yet been in operation for 12 months)
Depending on the type of business, additional documentation can be necessary. For instance, companies that are regarded as non-profit organizations must present documentation of their non-profit status. Agriculture-related enterprises will have to present evidence that they qualify for EIDL financing.
The grant from the EIDL is tax-free. The $1,000 gift is not required to be repaid because it is a grant and not a loan. Grants are not regarded as taxable income by the IRS.
Yes, self-employed people may pay themselves out of EIDL monies. It’s crucial to remember that EIDL monies may only be applied to commercial endeavors. Self-employed people are permitted to pay themselves out of EIDL funds for services rendered to the company, but they are not permitted to use the funds to cover personal expenses.
A sort of security that denotes ownership in a company is called a Beneficial Unit Certificate (BUC). Businesses that are not publicly traded frequently use BUCs to raise financing. BUCs allow investors the right to vote on some business-related issues as well as the chance to get a share of the company’s profits.
An official document known as a shareholder certificate certifies ownership of a certain quantity of corporation shares. Individuals who buy equity in a company are often issued shareholder certificates. Shareholder Certificates are tradeable on the stock market and can be used as evidence of ownership.
The Business Loan Application, Economic Injury Disaster Loan Supporting Information, Tax Information Authorization, Personal Financial Statement, Schedule of Liabilities, and Gross Revenue Report are only a few of the forms that are included in the list of supporting documents for EIDL loans. Self-employed people may pay themselves for work linked to their businesses using the $1,000 EIDL award because it is not taxed. Legal documents that attest to ownership in a company include shareholder certificates and beneficial unit certificates.