
How to Manage SBA Loan Payments in QuickBooks
Learn the step-by-step process of handling SBA loan payments in QuickBooks, including splitting payments for principal and interest.
In this guide, we'll learn how to manage SBA loan payments in QuickBooks by splitting them into two separate electronic funds transfers (EFTs) for accounting purposes. Although the actual payment is automated and deducted as a single transaction from your checking account, it's important to record the principal and interest separately in QuickBooks. This method helps maintain clear internal accounting distinctions, such as allocating the principal to the capital improvement fund. We'll walk through the steps to ensure accurate financial records and streamline your bookkeeping process.
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Here's a quick demonstration on handling SBA loan payments. These payments are automated and deducted from our checking account monthly, so we don't need to worry about them. However, we must account for them in QuickBooks. Steve has determined a new method for managing this.
I will provide a link or post the images in the guide for you. Now, let's walk through how to do it.
Bottom check = principle (capital improvement fund)

The SBA loans are recorded in QuickBooks. The most recent entry is dated April 9th.

Below, we have two lines. One is for interest, and the other is for principal.

Now, we will pay these via two separate EFTs, even though only one occurs in real life.
This means we pay them automatically once a month with one payment for the full bill amount. However, in QuickBooks, we'll split it into two payments because the principal should be paid from the capital improvement fund. This is an internal accounting distinction, not a real-world account.
You can refer back to see how I've done it here. There's a loan dated March 9th, and two payments dated March 11th, representing principal and interest.

I'm going to select "New Transactions" and then "Pay Bills."


Scroll down, find your SBA bill, and click the box to the left of it.

In this case, I'll leave it as today's date since it's close. It's the 10th, and I prefer it to be near the bill date, which is the 9th.
On the far right, everything shows zero except for the one we clicked on, which shows $1,022.00 - this is the "amount to pay" column.

When you select a checkbox on the left, it automatically assumes you'll pay the full bill. However, you can specify a lower amount on the right. For example, I'll type 161.03.

I will click "Pay Selected Bills."

When the next screen appears, I will select "Pay More Bills."

I'll scroll back down to find the SBA bill again and select it on the left, just like before. It will automatically show $860.97, which is the balance after the first payment. In other words, only the principal remains.



I usually click "pay selected bills" again. When the prompt appears, I click "done."


Looking at the SBA vendor account, I see two checks from April 10th paying the SBA bill. They don't have numbers, so I need to assign a number to each one.


This involves paying the principal. First, change the bank account for this transaction.

It should be funded from the capital improvement fund.

A pop-up will appear saying the account has changed.

Great - now that won't happen to you. Next, we need to uncheck "Print Later."

Once you've done that, this box becomes editable.

Delete the automatically assigned number and type "EFT." Save and close when finished.

It will warn you about some making the change; just click yes.

I'll pull up the other check.

This interest should come from the general operating fund. There's no need to change the bank account for this one, since it defaults to the general fund. I will uncheck "print later," enter EFT as the check number, and then save and close.




Now, if you look at the account, you will see the two payments.

Both indicate that the number was EFT. On this screen, you can also see which one is for capital improvements and which one is for general.

That's the main point (splitting the payment between gen fund and capital), so make sure it saved correctly.