Many received an email from the SBA asking whether or not they wanted to increase the size of their Economic Injury Disaster Loan (EIDL). If you would like to do so, you should probably do it now. The funding for this popular program is set to run out by the end of the month.
The program officially stopped taking new applications at the beginning of this year. But borrowers who had already received an initial EIDL are still able to request an increase.
At the beginning of the pandemic, most received an initial loan of $150K. Subsequently the maximum available, depending on the size and needs of the borrower, has been increased to a maximum of $2M.
This is a regular 30 year amortizing loan, bearing an interest rate of 3.75% for most for-profit enterprises. Unlike the popular PPP Loan, it cannot be forgiven and must be repaid.
Initially there was a 12 month moratorium on payments which has now been increased to 24 months. Although payments are not due during this period, interest accrues and will be added when your first payment is due.
To request a loan increase, you may begin the process by logging into your SBA Portal.
Let me leave you with this.
I have received several requests for help in either buying or selling a business. Our Mergers and Acquisitions Due Diligence Program includes the following.
The Buy Side
If you’re purchasing a business, we’ll need to go through the last couple of years at least, on the businesses tax returns to separate fact from fiction. Doing this due diligence will normally provide various results.
1 – We may decide that this isn’t a good investment. We also run into situations where the Seller is trying to hide something, not wanting to provide the information we need to make an informed decision.
2 – If the tax returns and financial statements come out well under examination, this may be an investment that has potential.
3 – The due diligence may also uncover areas where the current management of the entity is doing a poor job of controlling costs or marketing their product. As such the investment, if managed correctly, could turn out even better than originally expected.
The Sell Side
If you’re selling a business, we’ll need to go through the last couple of years at least to make sure that everything was done correctly. This should be done before providing any financial statements or tax returns to the other side. Doing this due diligence will also provide various results.
1 – We may decide that the work needs to be amended prior to submission. You never want to send anyone financial statements or tax returns that aren’t air-tight.
2 – At this juncture we may want to postpone the sale until various improvements are made to the enterprises. We may find places where losses can be eliminated or profits can be enhanced, thereby increasing the selling price and marketability of the enterprise.
3 – Once we’ve decided to move forward, we should bring in a Certified Valuation Specialist (CVS) to determine the market value of the enterprise. If that works out as planned, we will certainly need to look at the tax implications of the sale prior to initiating anything.
For more information or to sign up for our package, please go to the following web address.
We’re all going to get through this. Let’s get through it together.
Accounting Solutions Ltd. stands ready to complete our mission and purpose of protecting you, your family, and your business. Whether you need Employee Retention Credits, M&A Due Diligence, Payroll Services, or Accounting and Tax Work, you have but to ask. I’m here and I remain,
Chris Amundson
President
Accounting Solutions Ltd.
773-267-7500
Note that the only professional services provided by Accounting Solutions Ltd. are those specified in a written communication from our office detailing the scope of services to be rendered and the terms and conditions applicable to the engagement.