What happens if you receive PPP and Eidl?

If the EIDL was not used for payroll costs, it doesn’t have any impact on your PPP loan. However, if you took out an EIDL before April 3, 2020, and used it for payroll expenses, you must refinance the EIDL by carrying over the EIDL balance into your PPP loan.

What happens if you can’t pay back Eidl?

First, the lender will seek payment from the business for the outstanding balance of the loan. However, if the business cannot pay the full amount, the lender will foreclose on the collateral pledged by the business. Your business assets may not have much value. In that case, the lender will abandon the collateral.

Can a business receive both PPP and Eidl?

The SBA has two loan programs to help small businesses impacted by the COVID-19 pandemic: Economic Injury Disaster Loans (EIDL) and the Paycheck Protection Program (PPP). If your business is eligible, you can get both loans, using the funds simultaneously, as long as the use of funds are not the same.

Can I use Eidl to pay myself?

Paying yourself is of the utmost importance. While EIDL funds cannot be used to make direct payments to owners, pay bonuses, or pay dividends to shareholders, EIDL funds can be used for payroll. Paying yourself and your employees (if you have them) is not only legitimate but necessary to keep your business running.

Can you get a second Eidl?

The SBA recommends you do not apply again as it will result in a notification that your application is a duplicate. However, you may be eligible for a larger EIDL loan. The SBA has recently increased the amount available to businesses that received EIDL loans before April 7, 2021.

Is there loan forgiveness for Eidl?

EIDL Loan Forgiveness. EIDL loans cannot be forgiven. EIDL loans do have a deferment period, however. Loans made during the 2020 calendar year have a 24-month deferment window from the date of the note.

Can I get a second Eidl grant?

You Can’t Apply For A Second EIDL Loan EIDL loans, while they aren’t forgivable like PPP loans, have incredibly long term lengths of up to 30 years, with fixed interest rates of 3.75\%.

Will EIDL loan be audited?

Do You Need an Audit on Your COVID Small Business Loan? But if you got an EIDL (Economic Impact Disaster Loan) the answer is yes. The answer is yes only if your loan is equal or greater than $750,000.

What can a sole proprietor use the Eidl for?

There are several eligible expenses that EIDL funds can be used. For sole proprietors and independent contractors, examples include payroll (your salary), rent or mortgage, your utilities, and other ordinary business expenses. If an expense is pertinent to your business operation, then it should be covered.

What can an EIDL loan be used for?

EIDL funds can be used for working capital and normal operating expenses, such as continuation of health care benefits, rent, utilities, fixed debt payments. The loan may be forgiven if all employee retention criteria are met and funds were used for eligible expenses.