SBA Economic Injury Disaster Loan question

sassyotto

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I applied for the COVID-19 Economic Injury Disaster Loan (thanks for the link Fred) and got confirmation email that they were working on it. This was the one where you could get up to 10,000 and not need to pay it back.

So today got and email saying that everything was ready and to create an account on their portal. So I create an account and yep, all the information is on there (no scam!) BUT I am approved for $21,300! Dont need that much and dont want to pay it back if I dont have to. Unemployment has not gone through yet as they are super backlogged so need advice from people that have gone through this process.
 

FredC

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My understanding is that the advance was $1000 per employee once they revised the rules. That is what wouldn't be paid back.

The loan has to be payed back at 3.75% for small businesses.

\are you asking if you should just take the loan while waiting for unemployment to kick in?
 

rider0992

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It DOES have to be paid back at 1%. Even at 30 yr. But, is not a Grant!!!
If you need it to bridge unemployment, do it. But read the fine print!
 
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FredC

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It DOES have to be paid back at 1%.
afaik the 1% is on the Paycheck protection program on "unforgiven" portion

The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

This loan has a maturity of 2 years and an interest rate of 1%.



EIDL doesn't have the forgiveness and is 3.75%


  • These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%.
 

rider0992

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Ok, I just know the EIDL is a Loan regardless of the interest. And the other piece of crap is too gray
for me!!
 

Lyman

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Mine came in last week, 23,000 at 3.75 % interest for 30 years. I declined it. I have recieved a 1000 for eidl grant ( one employee). My ppp came in 2 weeks ago and will start paying myself this week with that. ppp as long as you follow the rules and document every penny will be forgiven. I am off of unemployment and working full time. I will keep everybody up to date as this plays out.
 
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rider0992

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It’s like what Matthew Quigley says about reverse mortgages. It’s a loan, pure and simple, it’s how you pay it back that makes the difference🤷🏼‍♂️
 

Jim Williams

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Be sure and read the 11 pages of fine print very carefully. All your business stuff is collateral and you can't sell any of it. You are subject to audit at any time to make sure you are using the funds according to what they say you can. I was offered $43,500 today now that business is booming. No thanks. I have plenty of work once again.

If you really need money I would suggest a bank.
 
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Matt Wood

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They offered me $50k for 20something years at 3.75%. I declined that as well

I took the $1000 on the EIDL. That was a nice bonus.
 

sassyotto

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thinking along the same lines. April I pretty much didnt work but still no determination on unemployment. things are picking up but not even close to what I expected.

thanks for all the answers
 
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$45,000 here. Like everyone says , read the fine print on every page and if you still have questions call your SBA rep and ask questions. After we read the fine print the first thing that went through my mind was how many small business owners are going screw them self's because they didn't read the fine print.
 

Jimmy L

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Big government is watching the little guy.
But big one's like Planned parenthood will get away with it.

Same goes for the Kennedy center etc.
 
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Doug Rice

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Be sure and read the 11 pages of fine print very carefully. All your business stuff is collateral and you can't sell any of it. You are subject to audit at any time to make sure you are using the funds according to what they say you can. I was offered $43,500 today now that business is booming. No thanks. I have plenty of work once again.

If you really need money I would suggest a bank.
I don't believe everything is collateral on the 25K and under loan. I still don't think I will sign the papers.
 

randy

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I just have one question.

Where is all this "loan money" coming from? 🤔

:yoda::very_drunk:
The Federal Government is borrowing it to give or loan it away. Thus our National Debt is skyrocketing because many small business owners spend every dime year after year and HAVE NO EMERGENCY FUND for times of economic trouble. Our nation would be better off allowing these folks to go it alone, file bankruptcy and liquidate. They probably don't belong in business. If their bank won't extend them a line of credit why should the American Taxpayer be forced to back their loan / grant.

If you have been in business 5, 10, 20 years you should be able to handle a 90-120 disruption of business with no money coming in. I hope business owners in all industries go to school on this crisis and realize they need to grow up and be a big boy. Maybe that boat you are making payments on needs to go. Perhaps you don't need three motorcycles and would be better off having investments and a huge emergency fund.
 

Swani

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So far we haven't taken or applied for any money. I haven't read the small print but for some people if you can pay off a high interest card or loan it seems like pretty cheap interest.
 
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rider0992

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But who in God’s name do you think the federal government is borrowing it from? Who do you think they borrow it from when any natural disaster
comes along? I get where your coming from on being over extended, but if your business is shuddered completely and it looks as if it might not turn around for as long as 6 months, you might have to go to the bank to continue. Is that from being a dumb ass? No more than a tornado or hurricane coming through and everyone effected screaming like a pig under a gate for help. By the way, I didn’t get one red cent, but I’m not begrudging anyone who does. That national debt
shit is like abortion. It’s only devised for division!!
 

rider0992

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I say I didn’t get one red cent. I didn’t personally, but all of my employees went on unemployment. Whose paying for that? We know who, but I hope to and will benefit from that when the time is right. In the meantime, I’m not worried about making payroll or paying a loan back. I don’t know if I’m smart or dumb, I do use a porty every once in a while😬
 

Radar Foster

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The Federal Government is borrowing it to give or loan it away. Thus our National Debt is skyrocketing because many small business owners spend every dime year after year and HAVE NO EMERGENCY FUND for times of economic trouble. Our nation would be better off allowing these folks to go it alone, file bankruptcy and liquidate. They probably don't belong in business. If their bank won't extend them a line of credit why should the American Taxpayer be forced to back their loan / grant.

If you have been in business 5, 10, 20 years you should be able to handle a 90-120 disruption of business with no money coming in. I hope business owners in all industries go to school on this crisis and realize they need to grow up and be a big boy. Maybe that boat you are making payments on needs to go. Perhaps you don't need three motorcycles and would be better off having investments and a huge emergency fund.
Totally agree

the one mistake I made was shorting this market too early.

this market is within 10% of its March Highs with horrific economic data and raging unemployment

The next quarter GDP is going to horrific, which via taxes is how we pay for this mess
I had no idea that the Fed would backstop this market with UNLIMITED liquidity

we print money and then buy our own debt!

As we approach $10 Trillion , This ‘bailout’ is making the 2008 $700 Billion Economic Stabilization Act look like a rounding error
 

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