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Unlike the PPP, the EIDL advance, as well as the entire EIDL, are considered working capital loans and may be used to pay fixed debts, payroll, accounts payable, and other bills that could have been paid had the disaster not occurred. We are hearing from business owners who have shared their experiences regarding the EIDL with us that the SBA has been very helpful with questions, but that it will likely take a long time to get through and that funds distribution will likely take longer than you might otherwise expect. 60DBO-98588. Vague. Comment document.getElementById("comment").setAttribute( "id", "aea1d31f848c14f0c2ca0d98d028270b" );document.getElementById("e5a2a537dc").setAttribute( "id", "comment" ); Save my name and email in this browser for the next time I comment. There are businesses in certain industries that may have more than 500 employees if they meet certain SBA size requirements. Interest rates for the EIDL will be 3.75% for small businesses and 2.75% for non-profits with up to a 30-year term. We'd love to hear from you and encourage a lively discussion among our users. You can read about what that entails HERE. Am I missing something? Small business owners and independent contractors may still apply for Economic Injury Disaster Loans. Brian you are thinking of PPP loans. You are more than 60 days delinquent on child support obligations, You have judgements against you for federal debts and you have not worked out a satisfactory repayment plan, You have federal tax liens of more than $10,000 (you could still qualify, but you must provide a satisfactory explanation and be able to repay the tax debt (it’s recommended you work out a payment plan with the IRS as soon as possible). What Type of Business is Eligible for the EIDL Program? When I applied I noticed penalties will occur if the money isn’t spent appropriately, but the guidelines defining what is appropriate or not are as clear as mud. endobj
Generally, a history that consists of minor, isolated instances of adverse credit or late payments is acceptable. This article currently has 202 ratings with an average of 4.5 stars. This article describes the difference between the two: COVID Relief Loans: Economic Injury Disaster Loans Vs. Paycheck Protection Loans. Interest rates for the EIDL will be 3.75% for small businesses and 2.75% for non-profits with up to a 30-year term. They cannot be used to consolidate debt. Thanks SBA, Information is collected in accordance with our, Copyright © 2020 Nav. They provide free help to entrepreneurs. There are businesses in certain industries that may have more than 500 employees if they meet certain SBA size requirements. Ty Kiisel is a Main Street business advocate, author, and marketing veteran with over 30 years in the trenches writing about small business and small business financing. <>/XObject<>/Font<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/Annots[ 15 0 R] /MediaBox[ 0 0 720 540] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>>
The SBA offers what they call a. , that will help you determine if your business will meet those size requirements if you have over 500 employees. In addition, borrowers are required to buy American-made products when they are available. Refrain from posting overtly promotional content, and avoid disclosing personal information such as bank account or phone numbers. The advance portion of the loan will be based on the number of employees in your business and will be $1,000 per employee, up to 10 employees (or $10,000). At the moment you can still apply at SBA.gov. EIDL Advance does not have to be repaid. <>
The Economic Injury Disaster loan requirements are based on similar SBA disaster loan requirements that have been used in the aftermath of a hurricane, tornado, or other physical disaster, but in this case related to the economic injury caused by the COVID-19 coronavirus. %����
Will you help me with all honesty because I’ve been trying and haven’t seen any results and I own Three LLC’s and have future ideas with purchasing an INC Also. based on the number of employees in your business and will be $1,000 per employee, up to 10 employees (or $10,000). Because of the high demand for the EIDL, the SBA has capped the maximum loan amount available to $15,000—plus whatever your business qualifies for as the advance. ������\ � 4�cGY����Bzp�-"̒W2�L�����tm��=�K�$������0�C/�е]�N��$im�?�:cv2�6�p�� v8������ZX%sxw��c�$(! Record Retention and Casualty Insurance Requirements. They sent a letter today that simply said the decision was based on credit rating. Because of the high demand for the EIDL, the SBA has capped the maximum loan amount available to $15,000—plus whatever your business qualifies for as the advance. Right? I am neither an attorney nor an accountant so if you have any specific questions regarding how this might apply directly to your business, I recommend you consult with your own trusted legal advisor. The way the SBA determines whether or not your business is a small business is based on the average of your annual receipts or the average number of employees—usually under 500. The EIDL loan must be repaid over up to a 30-year term at 3.75% interest for businesses and 2.75% for nonprofits, with a one-year deferment on the first payment. This article was originally written on April 15, 2020 and updated on November 12, 2020. The eligibility requirements for the EIDL are slightly different than those for the PPP and are intended to provide economic support to small businesses to help overcome a temporary loss of revenue resulting from the pandemic; and other than the grant portion described below, does not rely on payroll numbers to calculate the loan amount. Will the EIDL loan be forgivable if used toward payroll ? There are disaster loans for homeowners but to my knowledge they apply in physical disasters like hurricanes. EIDL is for small businesses. Because the loan amounts for a PPP loan and the requirements around using the funds to primarily support payroll, for many small business owners who don’t have employees and don’t compensate themselves within a traditional payroll model, the EIDL might be a better option—because the EIDL loan requirements are different. |��Qd�,�2�G��L�B��Y�_��O�[��JWXSV)�Y�.���/q��
The only way to know for sure is to apply. “Non-medical collections or charged off accounts with an aggregate of $10,000 or less and foreclosures or deed-in lieu of foreclosures which occurred more than two years from the date of the loan application are all considered an acceptable credit risk and do not require any additional justification.”. Know what you can and can’t use your funds for in regards to your business, or you risk having to pay back what could have been otherwise forgiven. Generally, it’s permissible for EIDL funds to be used on expenses that fall into the following categories: Fixed debts (rent, etc. Their email address is, On April 14, 2020 the SBA published new guidance regarding the requirements for self-employed individuals and sole proprietors with no employees for the PPP. Fake news. Because the application volume is so high, the SBA suggests that you apply online, but if you have questions about the application or problems providing the required information, you can contact the SBA’s Customer Service Center at 1-800-659-2955 or (TTY:1-800-877-8339.
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