LLC Certificate for SBA EIDL Loan
If you are an owner of a small business that got approved a Covid-19 EIDL Loan from the Small Business Administration, then you may have or will get an email from an SBA agent requesting that you send over an LLC Certificate. The email from the SBA agent may read something like this:
Per your Loan Authorization and Agreement, please provide the following document(s):
Please provide a Certificate that includes:
- A statement that the LLC held a meeting
- A statement that the LLC authorizes acceptance of the SBA loan and specifying the loan amount
- A statement designating an individual or individuals by name and title authorized to sign the SBA loan closing documents
- The statement should be dated and signed by at least one member/manager/managing member of the LLC.”
If you received, this email from an SBA agent, do not panic, since the LLC Certificate is a very simple document you can do yourself and you will not need to hire an attorney to do this document. We even have included a downloadable template letter for you below.
What is an LLC Certificate?
To keep things simple, an LLC Certificate is a document signed by all the members of a Limited Liability Company, or LLC, to show that they have officially met to discuss and come to an agreement about any issue concerning their LLC.
Why is the SBA Requesting this LLC Certificate to All Businesses that Received a Covid-19 EIDL Loan from the SBA?
All businesses that applied for a Covid-19 EIDL Loan from the SBA had to apply for the EIDL Loan via the SBA’s website. Then, one of the business owners had to create an SBA online portal account to check the status of their EIDL loan application, and most importantly, electronically sign the approved loan agreement documents in order to get the funds deposited into your business bank account.
If your LLC has more than one member or owner, you may have noticed that the Covid-19 EIDL Loan Contract & Agreement only had to be signed by one member of the LLC to get your loan approved. The SBA wants proof that all members of the Limited Liability Company were in agreement in accepting the Covid-19 EIDL Loan from the SBA, and this is why they are requesting all LLC’s to send an LLC Certificate that demonstrates that all members of en LLC entity were in agreement in accepting an EIDL Loan from the SBA to their LLC.
Even if you are the sole member of an LLC, the SBA still wants a signed document to further show that you agreed on getting an EIDL Loan from the SBA to your LLC.
Why Does the Email from the SBA say, “Per Your Loan Authorization and Agreement”?
The SBA’s request for an LLC Certificate should not come as a surprise to business owners that approved and signed the SBA EIDL Loan Contract and Agreement.
On page 7, of your Covid-19 EIDL Loan Agreement and Contract, there is a section called, “RESOLUTION OF BOARD OF DIRECTORS”. This section of your EIDL Loan contract says, “Borrower shall, within 180 days of receiving any disbursement of this Loan, submit the appropriate SBA LLC Certificate or a Board of Directors Corporate Resolution.”
The LLC Certificate is the document that is used for LLC’s and the Board of Directors Corporate Resolution is the document used for Corporations. So, if you have an LLC that got an SBA EIDL Loan, then the SBA agent will request an LLC Certificate from your LLC. If your business’s legal structure is a Corporation, then the SBA agent will request a Board of Directors Corporate Resolution. Both documents are very similar and follow the same structure, they just have different names.
How to Do an LLC Certificate for an SBA EIDL Loan?
As mentioned above, you do not have to hire an attorney to complete an LLC Certificate for the SBA EIDL Loan. You can complete the LLC Certificate in any word processor you have on your computer. You can download a template of an LLC Certificate for an SBA EIDL Loan below.
Our template included in this blog is a very simple LLC Certificate. We have used it for many of our accounting clients that got EIDL Loans and the SBA has accepted it.
You can use our simple template, or you can also use a more elaborate template that is available on the SBA website. You can see the SBA’s LLC Certificate model via the following link….CLICK HERE.
You can watch a tutorial video on how to prepare an LLC Certificate for an SBA EIDL Loan via the following link: https://www.youtube.com/watch?v=OJ43wsGluRk&feature=youtu.be
LLC Certificate Template for SBA’s Covid-19 EIDL Loan
You can download the template for our simple LLC Certificate for the SBA EIDL Loan via the following link:
Thank you for reading, and remember that Freedomtax Accounting is a full-service tax accounting firm. Please call us at 407-502-2400, or email us at [email protected] for any tax accounting needs you or your business may have.
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If you received an EIDL loan from the SBA, you may have already received an email from an SBA agent requesting that you send over an LLC certificate.
In this video, we’re going to show you that it’s a very simple document that you can do on your own, that you don’t have to hire an attorney to do it and we’re even going to provide a template so you can do it and send it over to the SBA and that’s why we’re going to talk about in this video.
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If you got an SBA loan and EIDL loan from the SBA, the SBA is now starting to email the recipients of this loan, and they are requesting that you send over an LLC certificate.
Now, what is an LLC certificate? And it has a very legal definition, but I’m just going to put it in simple terms: An LLC certificate is just a document that is signed by all the members or the owners of an LLC to show the SBA that they have officially met. They have discussed and have to come to an agreement on any issue concerning their LLC. If you have a corporation, this is normally called a board meeting.
Actually, if you have a corporation, not an LLC, the SBA is going to request a board of directors corporate resolution, but since you have an LLC, they are asking for the LLC certificate. So the LLC certificate is the equivalent of a board of directors, corporate resolution documentation. Basically, the SBA, just one written proof that the members of the LLC sat down and they are all in agreement on accepting the loan.
So even if you are a single member, LLC, SBA still wants you to write and sign a document confirming that you are in agreement on accepting the loan. This should not come as a surprise because on page seven of the EIDL loan contract, it says that: within 180 days of accepting the loan, you have to send over a certificate of resolution so it was on the contract.
Now let’s just look at the sample. Basically, it’s a very simple document and we are going to provide a link to this document in the description below. So you can just fill it out. It’s already written out for you. so you just have to, on the bold letters here is where you have to change the content.
So where I says the name of the LLC, you put the name of your LLC and it reads: We, the undersigned being all the directors of this limited liability company consent and agree that the following operational resolution was made on. And here you’re going to put the date and the location of the meeting.
Now we recommend that the location be your business address. If you’re self-employed and on your schedule C you have your home address as the business address, put the address that’s on your schedule C. Important that the date that you put the meeting has to be a date that’s after the date you received the funds.
So look up the date you received the funds and the date you do, the meeting has to be after that date of receiving the funds. Then it says: “we do hereby consent to the adoption of the following as if it was adopted at a regularly called meeting of the managing members of this LLC. In accordance with the state law and the bylaws of this LLC, by unanimous consent, the managing members decided that:” Name of the LLC here you put the name of your LLC accepts a COVID-19 EIDL loan for the amount of: You put the loan amount that you got from the SBA via SBA loan application number. And here you put your EIDL loan application number and to use the funds for operational expenses of this LLC. During the COVID 19 economic hardship. The managing members of this limited liability company are authorized to perform the acts to carry out this company’s resolution.
Then on the bottom here, you put the name of each owner of each member of the LLC, you have to have the signature, the printed name, and the date. So it’s a very simple document.
Now we are going to provide a link where you can download that this template, and you just have to fill it out with your information and send that out to the SBA.
So as you can see, it’s a very simple document. You don’t have to pay an attorney to do it. Swap the information with your LLC information and send it over to the SBA. Now you can always contact us.
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