Author Topic: EIDL Loan  (Read 892 times)

dadbod

  • 5 O'Clock Shadow
  • *
  • Posts: 82
EIDL Loan
« on: July 25, 2020, 04:14:14 AM »
H all, question: anyone have experience with the EIDL loans and permitted uses of funds?  I'm looking for a clear, accurate summary of how the funds can be used.

Background:

My husband is self-employed and his business has suffered due to Covid.  He's paying for an office he can't use, has had expenses related to establishing video conferencing capabilities, and has had a decrease in revenue due to a combination of decline in customers and the need to work less so he could care for our son with childcare closed. 

He applied for and received the PPP, and used it to make up some for the loss of revenue and the rent.  All above board.

Around the same time, he also applied for the EIDL loan but heard nothing for months except for receiving the $1000 grant with no other communication.  About a month ago, he got notice that his loan was approved for $60,000.  Much more than we expected!  Terms, if you are unfamiliar with them, are good - 3.75%, 30 years, first year deferred. 

We are torn about whether to take the loan and how it can be used if we do.  We initially decided against it because: (1) we are doing okay financially, (2) the permitted uses are confusing and don't seem entirely applicable to us, and (3) we don't want to take out more debt, even on good terms. 

The SBA continues to email him saying "Take our money, please!"  Actually, warning him that the time the loan is available to him is expiring.  The continued reminders are making us question whether we should take it.  We do have things we could use the money on - his start up costs for video conferencing were put on a business line of credit, his work is still a little slow, he is still paying for an office he can't use. 

I think we are making the right decision by not taking the loan, but it is a tough one.  Any thoughts?

Thanks!

Saving in Austin

  • Stubble
  • **
  • Posts: 192
Re: EIDL Loan
« Reply #1 on: July 25, 2020, 07:18:22 AM »
If you don't need the money, then don't take the money.

I would only take it to pay off more expensive debt or if I had a real need for a business loan.