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EIDL Loans: Terms and Conditions

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Video Transcription

Let’s gather your information to apply for your EIDL loan or emergency grant. The first part of the application is going to ask what type of entity you are, so you have to know who you are. If you are an S corporation, a C corporation, a partnership, or an LLC. Filing is one of these types of entities for federal tax purposes, you are going to choose that you are an applicant is a business with not more than 500 employees. If you file a schedule C on your personal tax return or operating as an independent contractor, you’re going to select applicant is an individual who operates under a sole proprietorship with or without employees or as an independent contractor. If you are a nonprofit organization and you have been granted tax exemption status by the IRS or your state, then you will select the applicant is a private nonprofit organization.

This is a type of entity that would file a 990-N, 990 E-Z or a 990 the next information they’re going to ask is about your business, so you are going to need to know your business legal name. The trade name is going to be your DBA or do your business as if you don’t have a DPA. Then you are going to use your business legal name. The federal ID number is a nine-digit number of signed to you by the IRS for using your business. If you are a sole proprietorship and don’t have an EIN, then you will use your social security number.

The next field on the application will be a drop-down menu and it’s going to ask you your organization type. This will be the legal structure that you filed with through your secretary of state. If you have LLC at the end of your business name, then you are a limited liability company. If you file a schedule C on your personal tax return, then you are a sole proprietorship. If your business files an 1120 you are a C corporation. If you file an 1120S you are an S corporation and if your business files a form 1065 you are a general partnership. If your business has LP at the end of his name, you are a limited partnership. If your business has LLP or LTD at the end of his name, you are a limited liability partnership and if you receive a 1099 for your work and you may or may not follow a schedule C on your personal tax return, then you are an independent contractor. The next question on the on the application is gross revenue and after that cost of goods sold. We’re going to go through that more detail in the next slide.

If your business holds rental property and you have lost rent, the amount of lost rents you have for the current month or since this outbreak started is where you will put that information, the date your business was established. If you were an LLC or corporation, you are going to use this as a data formation with the secretary of state. The number of employees question is what you put as of January 31, 2020, if you have no employees, it is okay to put zero in this field. Now in order to calculate your cost of goods sold and your sales, you’re going to have to look at your financial reports or bank statements for the time period February 1st, 2019 through January 31, 2020, to compute your total sales. It’s very easy if you already have an income statement or profit and loss statement prepared by an accountant or bookkeeper. The income statement is going to say sales on the very top section of your report. It could also say gross sales.

This income statement can also be titled a profit and loss and again, your sales are going to be your first number and they may also be listed as Gross sales. Gross receipts is another terminology that is used for sales. If you do not have financial statements, you are going to have to go through your bank statements and total all your deposits that you received for products or services. Do not include in this dollar amount, anything that you deposited into your bank that you loaned the company personally or took out from a bank or credit card to loan to the company. This will only be deposits for sole product and services. Now to determine your cost of goods sold, you are going to go through the following steps. Now this is only going to apply if you are selling a product. If you were in the service industry, you will not have costs of goods sold and should enter zero in that field.

So the cost of goods sold section is right underneath the sales section on your income statement and on your profit and loss. There will usually be several titles of different categories in the section. Usually, materials, supplies, and labor are included in the cost of goods sold section. You want to take the total cost and enter that in your cost of goods sold on the application. If you sell products but you do not have an income statement or profit and loss, then you are going to have to again go to your bank statements and probably your credit card statements as well and you’re going to have to total all your expenses you use for producing the product that you sell. This is going to include material purchases, labor costs, and frightened delivery cost amongst other things.

What other information will be needed. At the end of the application, you are going to enter in the name of your bank, your business account number, and your business routing number. The business account number can be found on your checks and it can also be found at the top of your statement. The business routing number is a nine-digit number, which it also is available at the bottom of your checks. It can usually start with 1, 1, but not always. If you are unsure of your routing number, you can call your bank or you can Google it online. If you are with a bigger bank such as Chase, Bank of America, or BBVA as an example, you’re going to want to make sure that you also get the right state. So if you were in the state of Texas, you are going to say Chase routing number Texas. If you are in Michigan, you’re going to say Chase routing number Michigan. The larger branches do have different routing numbers for different areas of the country. So it’s imperative that you get the correct routing number. The best insurance way to do this is to check on your checks themselves or to call your bank

Donna Bordeaux, CPA with

Creativity and CPAs don’t generally go together. Most people think of CPAs as nerdy accountants who can’t talk with people. Well, it’s time to break that stereotype. Lively, friendly, and knowledgeable can be a part of your relationship with your CPA as demonstrated by Donna Bordeaux and PYOP Donna and her husband, Chad, who is also a CPA, have over 50 years of combined experience as entrepreneurial CPAs. They’ve owned businesses and helped business owners exceed their wildest dreams. They have been able to help PYOP studios earn 4 times more profit than the average PYOP and are passionate about helping industries that help families build great memories.