EIDL Loan: What Can You Use it For?




SBA EIDL Loan… You’ve been approved and you’re wondering… , “What can I use the SBA EIDL loan for? Can I pay off my mortgage with it? Can I buy a new truck? Can I buy a new rental property? CAN I PAY MYSELF?!?!” Well is this video, we are going to break down exactly what you can use the SBA EIDL loan for and what you CAN’T use it for. I did a video last week about how I got approved for my SBA EIDL loan for $120k, but I declined and did not sign the loan documents.

📑 EIDL Loan Contract Breakdown: https://www.youtube.com/watch?v=sJbMtGF420Q

📉 How to Pay Off Your Mortgage in 5-7 Years (On Average):

I did not feel as if it would benefit our company with all of the stringent requirements that the SBA has within the loan contract. If we were going to utilize the SBA EIDL loan, we would have had to be VERY strict with our bookkeeping and literally give the SBA an open invitation to look at all of our financial information within our business at our own expense.

0:00 – EIDL – What can you do with the funds?
0:32 – Why I won’t take the EIDL loan offer.
1:04 – What can you use the EIDL money for?
1:10 – You can use the money for working capital only.
1:28 – Rent, Mortgage Payments, Payroll, virtual assistants, utilities.
1:55 – Paying Independent Contractors
2:05 – Not used for physical repairs
2:44 – Paying for Bills
3:03 – Cannot use for advance rent or mortgage payments
3:50 – Credit Card payments
4:05 – What you cannot use the EIDL Loan for
5:49 – Cannot use for buying rental properties
6:12 – Cannot Use for buying vehicles
6:46 – The key is proper Record keeping
7:36 – How would SBA know?
8:29 – What can SBA do if you violate the agreement?
9:30 – Final Remarks

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#SBAEIDL #EIDL #eidlloan

Let’s break down what you CAN use the SBA EIDL loan money for:

Business Operating Expenses
This means it can be used for rent & early mortgage payments, NOT including early payments, payroll for employees/virtual assistants, independent contractors, accounts payable, and utilities for your workspace.

Now, what CAN’T you use the SBA EIDL loan money for:
1. Distribution of dividends to the Business Owners, loaning the money to yourself, and can not use the money to loan to anyone else.
2.Expansion of Business
3. Paying off your mortgage early.
4.Purchasing/Acquiring new properties.
5.Buying a new car

The SBA EIDL loan money is literally just to keep your regular business expenses up to date and we COMPLETELY understand why to prevent any abuse of the EIDL loan.

So how would the SBA know what you are doing with the money and what are the consequences of misuse?

The SBA requires strict bookkeeping, record keeping, as well as maintain a ledger of receipts, invoices, ; pretty much all records of how the money was spent. The SBA has the right to audit your business books by making you hire a CPA to furnish the reports to the SBA. If the SBA deems that you’ve violated the loam agreement and subsequently you default, the SBA has the right to call the entire loan due. If SBA deems that you’ve lied, cheated, or misrepresented your business when getting the loan, you can be liable for a penalty of 100-150% of the loan amount.

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—DISCLAIMER— The suggestions, advice, and/or opinions that are given by Sam Kwak (The Kwak Brothers) are simply opinions. There are no guarantees of set outcomes. Listeners, guests, and attendees are advised to always consult with attorneys, accountants, and other licensed professionals when doing a real estate investment transaction. Listeners, guests, and attendees are to hold Sam Kwak, Novo Elite, Inc. and the Kwak Brothers brand harmless from any liabilities and claims. Not all deals will guarantee any profit or benefits. Listeners, guests, and attendees are to view and listen to all materials and contents furnished by the Kwak Brothers as a perspective based upon experience.

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