Many businesses that tool an Economic Injury Disaster Loans (EIDL) the Small Business Administration (SBA) offered during the Covid-19 pandemic are now starting to get notices that payments under those loans are going to begin soon. EIDL loans had an 18-month deferral period from the date you took the loan, and for many, those loans now are starting to require payments.
In addition to making your regular scheduled payments now, there are a few loan covenants that most EIDL loans contain and you may not be aware of. Some of those loan covenants may contain restrictions like:
As you can see from the above examples, some of these can be very restrictive and we recommend you consult your CPA and Attorney on these matters, before you assume you are free to just do as you wish with your business finances once you’ve received an EIDL loan. Each EIDL loan is a specific legal instrument, you may or may not have some of the above examples in your loan.
Should you wish to talk about your EIDL loan and what to do/not to do, book a free 30 minutes consultation with our owner Matthew Shiebler, CPA. He’s been practicing accounting for over 25 years now and is a business owner, just like you!