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When You Wish To Reconsider An Economic Injury Disaster Loan

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When You Wish To Reconsider An Economic Injury Disaster Loan

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  1. When You Wish To Reconsider An Economic Injury Disaster Loan On June 15, 2020 the SBA resurrected the EIDL (Economic Injury Disaster Loan) application & advance portal for new applications from entitled businesses. Should I accept my Economic Injury Disaster Loan? That question as of late has been posed by many businesses. Listed below are a few reasons why you may wish to reconsider an Economic Injury Disaster Loan.

  2. You’re concerned about your credit: Individual lenders report SBA loans to credit bureaus. Since these loans are made by the Small Business Administration, Economic Injury Disaster Loan shouldn’t emerge on business or personal credit statements. However, for loans over $25000, the Small Business Administration files a UCC-1 filing which can emerge on business credit reports & may hinder your capability to avail other financing. You are not certain you require the loan: Several applicants are reasonably baffled & concerned regarding the future of their businesses. In the light of COVID-19 disaster they applied each program feasible, and are now trying to make a decision on how to move ahead.At the same time, there also people who consider this as chance to take benefit of low-cost funding even if they don’t actually require it. A study by the Inspector General reassessing earlier disaster loans discovered that “SBA issued EIDLs & non-EIDLs to businesses that didn’t undergo a financial loss or to businesses outside the time period of the crisis.You need a forgivable loan: EIDL grants advances that don’t need to be paid again. In contrary, EIDL loans aren’t forgivable & have to be repaid.

  3. You’re not sure how to make use of the funds: EIDL loans don’t come with any precise instruction regarding how the fund may be used; therefore it’s baffling to several business owners. However, EIDL loans mayn’t be used for: • Repair or replacement of physical damage• Payment of any bonuses or dividends• Repayment of stockholder/principal loans• Refinancing ling-term debt• Reimbursements to partners, owners, directors, officers or stakeholders except when directly associated to performance of service for the benefit of the applicant.• Pay any penalty occurred from noncompliance with a law, regulation or order of a local, regional, state or federal agency.• Payment of any part of a direct Federal debt excluding IRS obligations.• Relocation

  4. If you are not certain how to make the best use of EIDL funds, then feel free to talk to your CPA. Here at Foster Financial CPA, we specialized in bookkeeping in Phoenix AZ and we are pretty sure that we can help you in making the best use of your EIDL funds for the betterment of your business.

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