Small business oweners filling out paperwork

Loans Associated with COVID-19: Forms to Know

The COVID-19 crisis has left many businesses struggling and in need of economic support. Recent legislation has expanded or created additional availability to business loans. The U.S. Small Business Administration (SBA) Economic Injury Disaster Loans and CARES Act Payroll Protection Program are now offering loans to qualifying businesses. We anticipate applications for the loans will be addressed, at least to some extent, on a first-come, first-served basis, so businesses that want to apply are encouraged to do so as soon as possible.

Several pieces of information may be requested, including tax returns and business financial statements. The information requested will depend on the loan program requirements and the amount of the loan. Among the information that the SBA or other lender will request:

  • Personal Financial Statement
  • Form 4506-T
  • Schedule of Liabilities
  • Form 940, 941, and 944

Personal Financial Statements, often required from individuals applying for credit, summarize a person’s net worth. For its Loans, the SBA requests use of its Form 413 for 7(a) loans, like the Payroll Protection Program, or Form 413D for disaster programs, such as Economic Injury Disaster Loans (EIDL). The information requested on both forms is similar:

  • Personal assets, including cash, savings accounts, automobiles, and real estate
  • Personal liabilities, including debt to banks, mortgages, and unpaid taxes
  • Sources of income, including salary, investment income, and real estate income
  • Contingent liabilities, including endorsements, legal claims, and provisions for federal income tax
  • Life insurance policies held

IRS Form 4506-T, the form titled IRS Request for Transcript of Tax Returns, allows certain tax transcripts to be released, fee-free, from the IRS to you or to the party you designate.

Schedule of Liabilities is a suggested schedule of liabilities, as provided on SBA Form 2022, which asks for the following information on your notes, mortgages, or accounts payable:

  • Creditor name
  • Original loan amount
  • Issue date
  • Current Balance
  • Whether the liability is current or delinquent
  • Maturity date
  • Payment amount and frequency
  • How the loan is secured

Form 940, 941, and 944 are IRS Forms that report information associated with your payroll.

  • Form 940 is the Employer’s Annual Federal Unemployment (FUTA) Tax Return. Employers complete this form annually to report the company’s federal unemployment taxes.
  • Form 941 is the Employer’s Quarterly Federal Tax Return. This form contains information about income taxes, social security tax, or Medicare tax withheld from employees’ paychecks. It also reports the employer’s portion of these taxes.
  • Form 944 is used by small employers whose payroll tax liability is $1,000 or less. These employers file once annually instead of quarterly.

If you are compiling payroll internally, you are likely familiar with these forms and filing requirements. If you are using an outside payroll service, they are likely providing you with copies of the appropriate forms, either in hard copy, via email, or through your payroll service online portal.

As you navigate through the loan application process, the SBA or your lender will help you identify the forms and information relevant to your loan request. Not all loan applications will require the same information. Complete the requested information quickly and accurately. If you are not comfortable doing this on your own, contact HBK for assistance.

About the Author(s)
Amy Reynallt is a Manager with the HBK Manufacturing Solutions Group in the Youngstown, Ohio office of HBK CPAs & Consultants. She joined the firm in 2019 following 13 years in the manufacturing industry. Amy is experienced in navigating the strategic and financial matters associated with manufacturing and works closely with manufacturers to help them plan, execute, and meet their short- and long-term financial goals.
Hill, Barth & King LLC has prepared this material for informational purposes only. Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding the matter.

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