Using the EIDL funds

I'm sure this has been discussed, but I can't find a specific topic. My client was asking if they can do this or that with the EIDL funds, told her I'd check. Some of her this's are not permissible, like paying off her 5% mortgage with the 3.5% EIDL, and I'm pretty sure any business expense will be fine, but not restructuring debt or reorganization. Right? I'm so tire of reading about these **&#)# loans.

Let's be clear. To me EIDL is the $1k/ person grant. You can do whatever you want with that.

The PPP is the common one based on 2.5x payroll and must be used 75% for PR and the rest for rent and utilities.

Or are you talking about the BIG EIDL SBA loan?

Yes, JR, the main, big EIDL SBA loan. She has an offer on the table for about $150K. This is a business that is out of business for the most part as a tourist related business. They probably won't be even close to functioning until late summer, if then.

They have the PPP loan and $8,000 from the grant, and this offer.

This article speaks to the specific uses of the EIDL and the security interests, which I found to be of interest. You can’t sell, lease or transfer assets (other than inventory) without the consent of the SBA if your loan exceeds $25,000; ugh!

https://www.google.com/amp/s/www.forbes ... -know/amp/

Worth a read my friends.