$10,000 EIDL GRANT

I’m still wondering what kind of rates you’re used to making. Weekly revenue, fuel costs, etc. You seem to know a lot about the Bussiness. Educate Me.

 

So the federal government didn't turn into arrow truck sales.

 

Louisiana is about $350 a week.

 

I thought it was $247

 

It was no so much Arrow Truck Sales but it their financing partner by the name of Transport Funding which did not allow the over-payments to be applied towards principle unless done in 5K increments.
In case of EIDL you can pay it off early to save on interests.

 

Well, I ran an amortization, basically unless the money is all put to use, it’s a huge trap.The only way to benefit from it, is to use what’s needed, and pay what’s not needed back ASAP. For instance,using $7000, as I planned, while paying interest on 25k, if repaid over 2.5 yrs, is equivalent to paying around 20% interest. The best thing to do, is only take a minimum amount, and maybe more within the 2 yr. window, that’s allowed if needed. So, I’ll be using as little of it as possible, and repaying it ASAP. Otherwise, it will quickly become a bigger Liability than my current $18k. It would be nice to roll the $18k, together with the $7k, to get my Truck up to par. Having one low payment, and paying extra on the principle.That would be a benefit. But since the $18k was spent just before Jan 30th of this year, it doesn’t qualify as a covid 19 expense. Fair enough. I had a $1000 per mo. 18 mo. Plan for paying it off, anyways. Very easy to do, without a Truck, Trailer or car payments. It just goes to show, how tricky debt can be. It’s always better to keep it short term. More important than interest rates. Any amount of the loan used, that’s less than half of the total borrowed, that’s not repaid within 2 yrs. is basically a higher real interest rate than most credit cards. A potential disaster.

 

The old saying,” If it’s too good to be true” comes to mind.

 

Someone correct me if I am wrong but my understanding of the EIDL loan now is as follows.
This loan can be utilized better by those needing the working capital helping in situations where shut downs affected the business. It is to sustain the same or similar level of financing operations and cash flow as if Covid-19 did not happen. Things such as buying new or more equipment or even parts to do overhaul is at least problematic. In my understanding, it would be good for things like: making usual (similar to pre Covid-19 days) business card payments during Covid-19 period - not paying them off with a lump sum. Making equipment payments during Covid-19 - not paying them off with a lump sum. Paying rents or utilities (or in my case, I could use it for parking). If you utilized PPP for the payroll then it cannot be used to pay yourself either. Simply, this EIDL loan cannot be treated as a regular bank line of credit.

In my case I have

parking - $350
trailer - $600
insurance - $600
loadboards - $200
communication $200
----------------------
$1950 per month - so in theory I could direct it from EIDL loan at 3.75% for the duration of Covid 19 pandemic

It is difficult to escape a thought of taking the loan and using it to offset the above and direct the current income and savings towards a different goal such as a reefer or a truck. But we don't know how long the Covid-19 will continue so the legitimacy of utilizing the loan will remain in question.

For instance; I could take the full amount and then in a few months they will declare Covid-19 to be over and then there is the balance that I cannot use any more and perhaps I need to pay it back.

 

I think you’re right, about all of it. The exception in my case, is I could pay myself from the loan, and then pay that portion from the ppp, if I get it. Or pay myself with the loan, till it’s gone, but that’s crazy. Would I really be paying myself? Lol. It’s good, for an unexpected repair maybe, during these lean times, for that reason, I’ll keep it for a year. In reality, I should send $18k back right away. But since I’ve already got a lot of credit card debt, if Banks start tightening up, and cutting credit lines, like they did 11 yrs ago. I’ll be in a corner. My finances are small, I prefer to pay things off. Usually keep a safety net of cash, and availabile credit line, if needed, while paying things off, with every extra dime. Bottom line is, a record, reciept, or cancelled checks for at least the amount used, needs to be kept. Even if it’s for pay, before or after, any ppp funds were paid to yourself for payroll.

 

Just because the COVID emergency ends doesn’t mean the economic impact you endured ends.