How You Can and Cannot Use Your EIDL Loan
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What Is the EIDL Loan Program?
What Did an EIDL Loan Look Like?
EIDL Loan Rules
Be a business, agricultural enterprise, cooperative, Employee Stock Ownership Plan (ESOP), or tribal small business concern with 500 or fewer employees or a sole proprietorship or independent contractor or a small private nonprofit Not be engaged in any illegal activity (as defined by Federal guidelines) Not derive more than one-third of its gross annual revenue from legal gambling activities Not be in the business of lobbying Not be a state, local, or municipal government entity nor can you be a member of Congress.
What Could EIDL Loans Be Used for?
Payroll Health care benefits for employees Rent Utilities Fixed debt payments Repairs Replacing inventory.
EIDL Loan Use Restrictions
Paying off old debts (see exception for COVID-19 EIDL loans noted in previous section) Refinancing new debt Buying capital assets, new construction, or vehicles Dividends and bonuses Disbursement to owners (unless for performance of services) Repayment of stockholder or principal loans (with certain exceptions) Paying a direct federal debt except for IRS debts (but again, see exception for COVID-19 EIDL loans)
EIDL Loan Use for the Self-Employed
Wages, commissions, income, or net earnings (capped at $100,000 per employee) Employee benefits (costs for vacation, family, or sick leave) Insurance premiums Retirement benefits State and local taxes
How to Apply for Hardship Accommodation for EIDL
Borrowers are required to pay at least 10% of their monthly payment amount (with a $25 minimum), for six months. During the Hardship Accommodation period, borrowers can voluntarily make larger payments. The regular monthly payment amount will resume and be required after the six-month Hardship Accommodation period ends. Borrowers may be able to renew the Hardship Accommodation Plan, if necessary.
Eligibility & Enrollment
If your loan amount is less than or equal to $200,000:
If your loan amount exceeds $200,000:
Alternatives to the EIDL Loan
Equipment financing Invoice factoring and financing Lines of credit Traditional bank loans Business credit cards Merchant cash advances
Frequently Asked Questions
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