Over $200 billion in Economic Injury Disaster Loans (EIDLs) have been approved by the Small Business Administration (SBA) as of February 12, 2021. Yet many of those who have received their approval notification are confused about how they can use funds from their EIDL loans.
Can you use the EIDL on payroll and rent?
So if the PPP loan was spent on payroll and rent, you cannot use the EIDL on the same payroll and rent. They haven’t issued any more guidance on this yet. I feel that its relatively clear that you can’t pay your employees with the EIDL during the period your supposed to be using the PPP funds.
What do you need to know about the EIDL?
What is the EIDL? In response to Covid-19 the CARES act allocated a significant amount of funds (somewhere around 60 billion – with a B) to the Economic Injury Disaster Loan (EIDL) program. This is not a new program, its been around for a long time and is intended for disasters – but the terms to qualify are significantly relaxed.
Is the EIDL the same as the PPP loan?
There is no “forgiveness” process like the PPP loan, so there isn’t a back-end way of checking. However, it is considered fraudulent if you do not spend funds on allowable purposes. Can we have both the PPP and the EIDL?
How does the targeted EIDL advance program work?
The Targeted EIDL Advance provides advance funds of up to $10,000 to applicants in low-income communities who previously received an EIDL Advance for less than $10,000, or those who applied but received no funds due to lack of available program funding. I received an email invitation inviting me to apply to the Targeted EIDL Advance program.
How to track EIDL and PPP loan expenses?
If you have a PPP loan, an EIDL advance or an EIDL loan, then you may want to create a systems approach to tracking expenses for each of these programs. For example, if you are using QuickBooks, you can add a code (PPP Loan, PPP Forgiveness, EIDL Loan, EIDL Advance) to the memo field of each expense transaction.
How are eidls paid back after a business sale?
All EIDLs must be repaid at the time of the business sale, but they can be paid from the proceeds of the sale. Some sellers received both a PPP loan and an EIDL grant. In this case, if the PPP loan is forgiven, the grant is exempt from the loan forgiveness, and the seller is given a PPP loan payment plan to pay back the amount of the grant.
What can you do with an EIDL grant?
Regardless of how funds are spent, make sure that you are keeping accurate records. The easiest way to do this is by using a business bank account and tracking expenses in accounting software. Many small business owners took advantage of the EIDL Advance, a grant of up to $10,000 that does not have to be repaid.
Is the SBA still able to issue EIDL advances?
SBA is not able to issue EIDL Advances once program funding has been obligated and is no longer available. EIDL loan applications will still be processed even though the Advance is no longer available.
The Targeted EIDL Advance provides businesses in low-income communities with additional funds to ensure small business continuity, adaptation, and resiliency.
