$10,000 EIDL GRANT

There’s good debt and bad debt. If the debt creates positive income it’s good debt, if it takes money out of your pocket it’s bad debt.

You can turn that $500 month debt payment into $1k month income. It doesn’t matter what the long term cost of that loan is, it’s positive monthly cash flow. On top of that, you use the debt as a tax deduction as well as the depreciation on any equipment to offset the positive income.

 

Leveraging. It’s all good, when it works, a nightmare when it doesn’t. A great example is what happened in 08’,’09. Houses, Trucks, dropped to 40% or less than previous prices. The amounts owed were twice their value. Suddenly the Asset/Liability list is in the hole. Can’t sell it, for what is owed.

 

Can you borrow it and pay it off in 5 years? Can you grab say 30k keep it pay 500 a month against it and have the 30k free and clear in 6 years. Or is the 30 year thing written in stone???

 

You can pay it off early. There is not prepayment penalty - not that I see. The OP of this thread paid it off after a few days since disbursement.

 

I think it is more important to know what it can be used for.
Here is a link that sounds credible that answers quite many questions about EIDL in layman terms.

 

Pay it back any way you want, Still you’re paying interest, on the whole amount. Why not just save the money over 6 yrs? You’ll be ahead. My point was a line of credit, even at a higher rate, would be cheaper, only paying on the amount used. You’d have to run hypothetical amortization charts, to get an idea, of the actual % rate, based on amount, and time it takes to pay the whole loan off, to figure the real cost of the part of the loan used.

 

So you borrow it and you have to pay interest on the whole amount? As if it was a 30 term??? Or only for the time the loan was open?

 

The amount you borrow/receive from SBA. It accrues interest from day 1 on the entire amount you receive.
Payments are deferred for 12 months. Apr 3.99% for 30years. No penalties for early pay off.
My understanding is for the smaller $25,000 loans.