Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
6y
There are other threads here where people are trying to figure out what the expectations are. Overall the gist of the documents you sign seems to be that no, it can only be for losses incurred as part of the COVID economic disaster, and you agreed to allow an audit or inspection of your books to verify compliance.
I have no idea if they will really do that or how strictly they will interpret things if they do, we are in uncharted territory.
Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
6y
There are other threads here where people are trying to figure out what the expectations are. Overall the gist of the documents you sign seems to be that no, it can only be for losses incurred as part of the COVID economic disaster, and you agreed to allow an audit or inspection of your books to verify compliance.
I have no idea if they will really do that or how strictly they will interpret things if they do, we are in uncharted territory.
Investor · NC · Member since 2020 · 12 posts · 1 vote
6y
It could effectively be used by buy properties, as you could pay off existing mortgages (acceptable use) and use that equity to acquire new ones. I own 8 properties currently and was approved for a $3k loan, so unless you have a huge portfolio your probably not getting much.
It could effectively be used by buy properties, as you could pay off existing mortgages (acceptable use) and use that equity to acquire new ones. I own 8 properties currently and was approved for a $3k loan, so unless you have a huge portfolio your probably not getting much.
Can you provide a source for that "acceptable use" ? I'm not trying to argue, just had not heard that before and it would be nice to know for sure. I did get a decent sized EIDL loan and I am trying to go by the book.
Real Estate Agent · Atlanta, GA · Member since 2012 · 134 posts · 22 votes
6y
Funds are supposed to be used for working capital which I interpret as paying recurring bills including mortgages but if you follow David's strategy, I would purchase new properties in a different entity from the one you used to take the loan out with.
Originally posted by @Account Closed: Originally posted by @David R smith:
It could effectively be used by buy properties, as you could pay off existing mortgages (acceptable use) and use that equity to acquire new ones. I own 8 properties currently and was approved for a $3k loan, so unless you have a huge portfolio your probably not getting much.
Can you provide a source for that "acceptable use" ? I'm not trying to argue, just had not heard that before and it would be nice to know for sure. I did get a decent sized EIDL loan and I am trying to go by the book.
It could effectively be used by buy properties, as you could pay off existing mortgages (acceptable use) and use that equity to acquire new ones. I own 8 properties currently and was approved for a $3k loan, so unless you have a huge portfolio your probably not getting much.
Can you provide a source for that "acceptable use" ? I'm not trying to argue, just had not heard that before and it would be nice to know for sure. I did get a decent sized EIDL loan and I am trying to go by the book.
When I posted that it was based on letters I received from my two commercial lenders saying I could apply for that to use for paying off my loans with them. I had a low qualifying amount of money I could borrow ($3k) so I didn't precede, maybe you have agreed to conditions I never saw. Searching now I see your concern, it's a pretty fine line between paying debt and refinancing long term debt.
It could effectively be used by buy properties, as you could pay off existing mortgages (acceptable use) and use that equity to acquire new ones. I own 8 properties currently and was approved for a $3k loan, so unless you have a huge portfolio your probably not getting much.
Question on the use of funds - if I get the funds from EIDL in mid July, can I use part of the loan amount to reimburse myself for the past operating expenses that occurred between Feb and July (like mortgage, insurance, taxes etc.)? Or can I use the funds only for future operating expenses that will occur after the loan amount is deposited in my account?
Also, I have to pay some income tax when I file on or about 7/15. I file Sched E (passive income, no LLC). Can I pay part or all of the taxes with the EIDL? I saw that IRS debt is one of the acceptable uses of the fund. Not sure if regular income tax payment qualifies as an IRS debt.