USA Accounting for SBA Loan


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Our company just received SBA Loans, I understand this will be eventually a payable item which received cash in bank and credit in liabilities. But is there anything else I need to pay attention with regards to interest rate and holding period? This is something new to me in 2020.
 
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Werner Reisacher

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It depends on the conditions under which such funds were given to you. You will find answers to those questions under the following URL
To me, the question of how the government will control the distribution of the funds that are given under the Payroll Retention program. handled.
 
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What I understood these loans are at 1% interest and loan can be forgiven in the future if small business meet their criteria. Interest is not due for until 6months or year I believe. You can accrue Interest if you want to each month until you start making payments. If it’s not material you can skip. Hope this makes sense.
 
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Werner Reisacher

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I suggest you read the following article. It clarifies the issue of interest accruals. The accumulated interest accrual will actually become part of the debt forgiveness if your application is accepted. The option to claim the fees (accounting/lawyers) incurred in connection with the PPE loan is also an interesting point. The main issue, make sure that you record the funds you received as a loan payable.
For the time being, there are no GAAP/FASB comments/indications out to the best of my knowledge.
I posted another URL on this forum with regards to how to compute the payroll portion of the PPP program. Owners' payroll and the company's contribution for some of the retirement savings can be included.

 

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