[US] COVID-19 How to bookkeep your EIDL grant and loan

If you’ve received an EIDL grant or loan, here’s how to bookkeep it, from start to finish.

The Economic Injury Disaster Loan program is offered through the Small Business Administration. Unlike PPP loans, EIDL loans aren’t forgivable, but part of the CARES Act changed the program to offer an emergency grant up to $10,000 per business. This grant doesn’t have to be repaid, even if your loan application is ultimately denied.

The SBA refers to this grant as an "advance," because if your loan is approved, the loan proceeds you receive equal the total loan amount minus the grant amount you’ve already received.

To record the grant:

  1. Under the Accounting tab in the left-hand navigation menu, select Chart of Accounts, then click the Add a New Account button.
  2. In the Account Type dropdown, scroll down to Income and select Other Income.
  3. Enter a name that you'll easily recognize, like "EIDL grant." Click Save.
  4. Now head to the Transactions page. Click Add income to create a transaction.
  5. For the Account, select the bank account the grant was deposited into.
  6. In the Category dropdown, scroll to your Income accounts, select the new EIDL income account you just added, and then click Save.

If you’ve connected your bank account to Wave, it will import the deposit transaction in your account. Instead of creating a new transaction, you can simply categorize the imported transaction to the grant income account.

To record the loan:

  1. Under the Accounting tab in the left-hand navigation menu, select Chart of Accounts, then click the Add a New Account button.
  2. In the Account Type dropdown, scroll down to Liabilities & Credit Cards and select Loan and Line of Credit.
  3. Enter a name for the account like "EIDL Loan." You can also include an account number and a description, if you'd like. Click Save.
  4. Now head to the Transactions page. Click Add income to create a transaction.
  5. For the Account, select the bank account the loan proceeds were deposited into.
  6. In the Category dropdown, select Transfer from Bank, Credit Card, or Loan, select the EIDL loan account you just added, and then click Save.

Because the EIDL is a loan with standard terms, the payments can be recorded as you would payments on any other loan.

Recording EIDL loan payments:

  1. Head to the Transactions page. Click Add expense, enter the bank account for the payment with the Account dropdown, select the Date of the payment, and enter the payment amount into the Total amount box. Or, find the imported expense transaction in the bank account, and select it to open the transaction details pane.
  2. Below the Category dropdown, click the Split this withdrawal button.
  3. In the Category 1 dropdown menu, select Transfer to Bank, Credit Card, or Loan and then select the EIDL loan account. Enter the principal payment amount into the Amount box.
  4. In the Category 2 dropdown menu, select Interest Expense, and enter the interest amount into the Amount box.
  5. Click Save, and you're done!

Keep in mind that there are no prepayment penalties on an EIDL. If you make an extra principal-only payment, you can skip the "Split this withdrawal" button (step 2 above) and categorize the entire amount directly to the EIDL loan account.

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