Real Estate Agent · Atlanta, GA · Member since 2012 · 134 posts · 22 votes
I'm not sure exactly where to post this question but here it is, I was one of the fortunate ones to be granted an EIDL from the SBA. There's a clause that says it can't be used for physical repairs which makes sense if you have a brick and mortgage store/office but in our case as rental property owners, can I use the loan funds for a repair such as a gutter replacement??? I haven't called the SBA, kind of afraid to get an answer from someone who doesn't really know the answer. Hopefully someone can provide some information here that I can use when I do call the SBA. Thanks in advance!
No idea who phelps.com is, but call the SBA as opposed to going off these 3rd party sites. I'm learning each day that no one seems to really know what the funds can be used for because there are sooo many scenarios. In fact, I just had a conversation with an SBA agent yesterday who told me the funds CAN be used for "normal repairs" that are part of a normal business operations. When in doubt, if you're not sure about something, just call them and ask if it's approved...and document what you're told.
I'm not sure exactly where to post this question but here it is, I was one of the fortunate ones to be granted an EIDL from the SBA. There's a clause that says it can't be used for physical repairs which makes sense if you have a brick and mortgage store/office but in our case as rental property owners, can I use the loan funds for a repair such as a gutter replacement??? I haven't called the SBA, kind of afraid to get an answer from someone who doesn't really know the answer. Hopefully someone can provide some information here that I can use when I do call the SBA. Thanks in advance!
No idea who phelps.com is, but call the SBA as opposed to going off these 3rd party sites. I'm learning each day that no one seems to really know what the funds can be used for because there are sooo many scenarios. In fact, I just had a conversation with an SBA agent yesterday who told me the funds CAN be used for "normal repairs" that are part of a normal business operations. When in doubt, if you're not sure about something, just call them and ask if it's approved...and document what you're told.
@Account Closed Well not just phelps but I'm been seeing physical repairs mentioned in other articles but it's harder to find specifics when it comes to real estate investors. If you don't mind please elaborate on "normal repairs". My understanding that recurring maintenance is acceptable like pest control, lawn care, hvac servicing but what exactly is a normal repair? Thanks!!
That's my understanding as well, but they were so gray, I can't be certain. I was told "normal maintenance repairs, but not rehab." I then asked, what if someone had a property sitting vacant because it couldn't be rehabbed due to covid"...the guy I spoke with didn't seem too sure how to answer.
Anyway, to be safe, I'm just going to call them anytime I'm unsure of an expense and then document (day, time, agent's name) for my records just to be safe.
I'm also wrestling with this question. I want to use the money in good faith, but its just not clear what is acceptable. For instance, one of my properties needs a new driveway and needs to be powerwashed. Those are pretty standard operational expenses for a rental business from my perspective, but I'm not sure how the SBA would view them. Thoughts?
@Benjamin A Ersing I'm by no means an expert but based upon my understanding, replacing a driveway is not a recurring expense and can be considered an expansion of the business which is a no no. However powerwashing a driveway could be a recurring maintenance expense which can qualify for the EIDL. But to double check you can call the SBA and follow CJ M's suggestion and notate the person you spoke with the answer they gave you. If you do, please so share what they say!