I secured a small business loan to purchase an existing business. How do I enter that SBA loan in quickbooks desktop? This loan was used towards the purchase of the business including the building, a liquor license and all the loan fees. I used money from my home equity for the balance of the loan. How do I enter these in Quickbooks desktop.
Thank you!
The SBA loan is entered as a Long Term Liability. Just make the placeholder in your COA first, then post your purchase.
Then you may wish to use a Journal Entry. That is what I do for property purchases, matching the HUD-1 statement line by line. Some of the costs may be current expense such as property taxes or utilities paid at closing but most are asset items. Your loan fees are amortized over the life of the loan. Building value must be separated from Land as Land cannot be depreciated. You can do that in this JE or an additional one once you have a total on the entire asset. We go by tax assessment % for land/bldg and remove land value of the total asset value not just purchase price.
The liquor license may or may not be a depreciable asset. You will have to verify.
Finally, your personal contribution is considered Owner Equity Contribution (Member Contribution if you are an LLC) and is posted as such. Assuming for a moment you are not a Subchaoter S corp then when you "pay " yourself it is just distribution of Owner Draw (equity out)
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