Ineligible Uses of EIDL Proceeds
I have clients who have been approved for Economic Injury Disaster Loans through the SBA. There are restrictions around use of the loan proceeds. I did some digging, and below is a list of ways that you are NOT allowed to use the funds:
Payment of any dividends or bonuses
Disbursements to owners, partners officers, directors, or stockholder except when directly related to the performance of services for the benefit of the applicant
Repayment of stockholder/principal loans, except when the funds were injected on an interim basis as a result of the disaster and non-repayment would cause undue hardship to the stockholder/principal
Expansion of facilities or acquisition of fixed assets
Repair or replacement of physical damages
Refinancing long term debt
Paying down (including regular installment payments) or paying off loans provided, or owned by another Federal agency (including SBA) or a Small Business Investment Company
Payment of any part of a direct Federal debt, (including SBA loans) except IRS obligations
Pay an penalty resulting from noncompliance with a law, regulation or order of a Federal, state, regional, or local agency
Contractor malfeasance
Relocation
For more information on the EIDL program, send me an email at stevie@balancebystevie.com, or sign up for my newsletter!
