COVID Relief: How You Can (& Can’t) Use Your Economic Injury Disaster Loan & Advance

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One of the most typical concerns we’ve discovered is how EIDL funds can be utilized. The bright side is that there are limited restrictions on the usage of these loans. While most of your functional expenditures will be covered, though, there are a few limitations. Whether you’re still waiting to request your loan or your funds just hit your savings account, keep checking out for more information about how you can– and how you can’t– invest your EIDL funds.

The EIDL is a low-interest, long-term loan for small company owners that have been affected by COVID. These loans provide low, set rates and payment terms up to 30 years. Organizations with less than 500 workers, specific nonprofits, and farming organizations can be and use approved if they meet all requirements set by the SBA.

If you’re a little organization owner, chances are you’ve been affected in some way by the COVID-19 pandemic. And if that effect has been huge? You’re absolutely not alone. Small company owners around the world have actually been hit hard, with lots of struggling to keep their companies afloat. Fortunately, there are a couple of monetary chances offered to assist you through these hard times. One that you may have currently become aware of is the Small Business Administration’s Economic Injury Disaster Loan (EIDL).

Can I utilize EIDL funds to pay off debt? It depends. You can utilize EIDL funds to settle regular set payments, such as your company charge card. The SBA does prohibit you from paying off specific types of debt. This consists of repaying direct federal debt (including SBA loans), as well as paying down or settling loans owned or issued by federal firms.

Can I utilize EIDL funds to pay myself? If you make a salary for work performed within the company, EIDL funds can be utilized to pay your salary. Nevertheless, any disbursements or dividends can not be paid to you or anybody else using these funds.

Can I utilize EIDL to purchase devices?

More On COVID Relief For Small Businesses

The caveat for debtors that received both the PPP loan and the EIDL is that funds can not be used for the same function. If you received both loans and invested your PPP funds on payroll costs, you can’t likewise utilize your EIDL funds for these very same expenditures during your 8- or 24-week PPP covered period. Loans Owned By Federal Agencies: Your EIDL funds can’t be used to make installation payments, pay down, or pay off any loan owned by a federal agency. If you earn a salary for work carried out within the service, EIDL funds can be used to pay your salary. Can I utilize EIDL funds to pay off financial obligation?

Looking for other COVID relief options for your small service? Merchant Maverick has you covered! We’ve taken the time to research a range of options to assist you throughout this challenging financial time. Take a look at our coronavirus resource center, where you’ll discover more details on whatever from emergency situation service loans to guidance on using company credit. There are a variety of resources readily available to assist your organization during this vital time, so take the time to get more information about these resources. Best of luck and remain safe!

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