EIDL Advance - Next steps
You’ve received your advance, what’s next?
Advance’s are being deposited straight to your account for $1k per employee, up to a maximum of $10k, 10 employees.
Did you apply for the $10k grant, also (properly!) known as the EIDL Advance? I know that’s a lot of you, so listen up...
The SBA changed the structure of the advance slightly so it’s now $1k per employee up to a maximum of $10k, 10 employees.
People have started to see the advance coming through so it’s important to know what’s going to happen next and what you need to do.
The advance was a condition of applying for the full EIDL loan, even if you had no intention of taking it. So shortly after you receive your advance, you’ll receive your loan offer.
You must accept or reject the loan.
If you accept, you take the loan with the repayment and interest. This is accounted for as a liability to your business.
If you reject, no loan, but you keep the advance money and it’s treated as a business grant. It’s not included in income or taxable. But you have to reject the loan, please do not ignore the email. You should account for the grant in a separate equity account to make sure it doesn’t show as taxable income on your income statement.
Before you reject the loan though, make sure you consider what could happen in a month or so. Obviously we’re hopeful everything is going to open up and get going again but it’s not a given. Even if you have PPP, you can still take EIDL after that’s used up.