Originally Posted by tn0087:
Hi Everyone,
Has anyone gotten good information around how the EIDL loan can be used? I've seen some stipulations, but they generally have the disclaimer "other operating expenses" that would have been paid if the disaster had not occurred.
We were planning to fence the backyard this summer so it can be used as Daycare space. Since moving into the home we haven't been able to use it due to a pond off of our property, but too close in proximity to the yard for NYS to allow. When this hit, we decided to hold off and save money just in case, but we would consider using an EIDL for it if possible.
Then there's the question of the future as the EIDL is a 30 yr loan and one would hope we're out of this by then. In 5 years are there stipulations still how the balance can be used?
Thanks for any suggestions!
The CARES ACT says the EIDL loan can be used for:
" USE OF FUNDS.—An advance provided under this sub- section may be used to address any allowable purpose for a loan made under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)), including—
(A) providing paid sick leave to employees unable to work due to the direct effect of the COVID–19;
H. R. 748—28
(B) maintaining payroll to retain employees during business disruptions or substantial slowdowns;
(C) meeting increased costs to obtain materials unavail- able from the applicant’s original source due to interrupted supply chains;
(D) making rent or mortgage payments; and
(E) repaying obligations that cannot be met due to revenue losses."
The last clause indicates that providers can use this money for any business purpose. In other words, when you have lost income and can't pay for some business expense you can use this money to pay for it.
So, you can use the money for the fence.
If you received the "advance" from EIDL that is under $10,000 you don't have to pay it back. Above that amount is a 30 years 3.75% loan.