$10,000 EIDL GRANT

That's the only way to do it, for those who hoped to acquire a "fixed asset".
Another unclear aspect is the duration of using EIDL as a working capital. As long as there is official Covid 19 pandemic, you can keep using it for all those revolving expenses to keep the business afloat as an official intended use but what happens at the moment when lock downs are lifted? Is utilizing the loan at that point unwarranted and the unused portion of it a subject of immediate pay back unless you want to keep paying 3.75% APR for money you cannot justify to use?
We are all right to at least discuss these things. I am sure lots of guys took the money already thinking that as long as they are using it for business they'll be all right. The problem is that this loan is very easy to get, yet when you think in depth of it being utilized as ONLY and EXCLUSIVELY the Covid 19 relief working capital, the scope of its use is not very vast, especially for an owner operator with a truck and trailer or two.
At the end it does not matter what a person's reasoning is. The may say something about Covid 19 aftermath use and some may even try to argue that equipment does not classify as a fixed asset. This and that...
As with IRS audits, it will be up to a SBA auditing official to review and rule, if an individual used the funds correctly or not.

 

I don’t remember reading anything about annual reports, unless requested. Just ut to 3 yr. records be available, if requested.

 

Here is another plain and simple explanation of what it can and cannot be used for.
And it also says about the penalties of misuse of SBA EIDL loan....so if you borrowed 100k and misused it, then they may fine you up to 150k.
I decided that I will not sign the docs because I don't want them to put a lien on my house in case of some misfortune/ or misunderstanding for the measly 60k I was offered. I'd rather take a regular commercial loan against the property or mortgage the house and then do what I please with the money... but that's not gonna happen.
The house is untouchable.

 

That’s the smart move. A few $k if needed, would be a help.If it was used. Not just sitting in the Bank, acruing interest. Paid back, within a yr. to minimize the cost of the loan. Anything more, isn’t a very good deal. If it were treated like a heloc, and interest only applied to the amount of funds drawn/ spent. It would be better. Trying to guess, how much might be needed, paying interest on the whole amount, while using a small amount at a time. Makes it a very expensive loan.

 

The problem is that people take more than what they need. I wouldn't borrow more than $20,000 for myself (one driver). People know that running this business costs a lot of money, especially if you are new to it.
By borrowing less, you know what it will be used for. They can offer you a bigger amount, it doesn't mean you have to borrow all of it. You choose the amount you want to borrow at the end.
We pay $2,000 just for the monthly insurance. I will have no problem showing $20,000 used by the end of this year. I can add a $400 monthly parking fee to that.
In eight months alone, it's close to $20,000. I can add the IRP bill to that. And it is satisfactory by the end of this year.
The math is simple. I don't even have to use my fixed payments for the truck and the trailer. What I can do is to have more capital available to pay off the loans that don't get paid off quickly enough due to Covid-19.

 

Either way, you still owe the money. The difference between the interest amount between debt paid off, and interest paid on the EIDL if any, depending on how long the EIDL is carried, would be the only benefit.

 

It will not disappear quickly as you think. The pandemic doesn't just go away like that. Some businesses will feel it for years.

 

And if you needed 85k, that would be a better choice. If you were unsure of the exact amount needed, and the time frame, it may be needed, a heloc, at a slightly higher rate, would be better. Only paying interest on the amount spent.

 

That is why I am not borrowing a larger amount. You need to take into consideration that capital that is leftover is going to be used for other payments to pay off higher interest rates. That means paying off credit cards for us. Everyone's situation is different. What calculates for some, doesn't calculate for others. This loan shouldn't be received by people who have means and are better off without it.