SBA EIDL Loan went through!! Unlock credit files to verify ident

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SBA EIDL Loan went through!! Unlock credit files to verify ident

Account Closed
Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes

I applied for an SBA EIDL loan almost immediately after they announced it. A few days ago I got a note saying they still have my app and sit tight. I got a 2nd email yesterday saying they were going to process it, and today I got an email saying I had been approved and needed to create an account.

I was approved for a nice margin more than what I said were my losses, but nothing crazy. The first step is to verify the amount, you can lower it if you want. The 2nd step is to verify identiy.

When I tried to verify identity, I got two errors, either "we're sorry we encountered an issue" or "we can't verify your identity online" .. I called the 800 number on the EIDL portal, and shockingly got someone almost immediatley. He looked at my app and said there are two problems: 

1. The system is glitching out and he said there is a ticket in with IT, they should have it fixed soon. 

2. There was a note on my file saying "no credit score" due to my credit files being voluntarily frozen at the 3 beurarus.  He told me to do a temporary unfreeze and then try again in a few hours when the system is hopefully back up.  

As far as I can tell, they aren't requesting any more information from me to complete the loan. My rentals are reported for taxes under my SSN and that's what I used to apply, so I figure they already had all the proof of they needed.

If you are still waiting on an EIDL response just hang in there. If you got approved and are having problems verifying identity, make sure you unfreeze your credit and also be aware there is a technical issue at the SBA verifying identities. 

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Sharon Rosendahl
Investor · Quilcene, WA · Member since 2017 · 230 posts · 169 votes
6y

I think what you get depends on who is processing your app. I put 0 employees and got $1000. There seems to be no rhyme or reason as to who gets processed when and who gets the advance.

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  • Evan Bonnell
    Investor · La Salle, IL · Member since 2014 · 43 posts · 28 votes
    6y

    Good for you! Happy to see other RE investors benefiting. Did they give any details on terms and conditions? @Account Closed

    0Reply
  • Avi Garg
    Rental Property Investor · Concord, CA · Member since 2016 · 499 posts · 219 votes
    6y

    Just make sure its not a scam. I have not heard of anyone creating an account after getting approved. EIDL money ($1k/employee) just showed up in people's account. 

    0Reply
  • Account Closed
    OP
    Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
    6y
    Originally posted by @Evan Bonnell:

    Good for you! Happy to see other RE investors benefiting. Did they give any details on terms and conditions? @Account Closed

     Not yet.. There is no obvious request for additional documentation that I can see.  The step after verifying my identity is to sign the "closing documents," but the button is greyed out and it seems the connection between the SBA and the credit bureaus is still overloaded.. I'm going to wait till late tonight and try and verify again and will update with what I find.   

    0Reply
  • Account Closed
    OP
    Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
    6y
    Originally posted by @Avi Garg:

    Just make sure its not a scam. Not sure why would they want you to create an account after you have been approved. For EIDL, I also had my credit frozen and no such questions were asked and no account created. The money just showed up. 

    Nope, SBA.GOV website, HTTPS certificate, and already had my info, I just needed to create a username and password.. Its totally overloaded and dysfunctional so I 100% believe this is a product of the current government administration, hahaha 

    Note that this is not the initial payment $1000 that did just show up, this is the actual 5 figure SBA EIDL loan. 

    1Reply
  • Account Closed
    OP
    Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
    6y

    Here's screenshots of the email and then the portal, if anyone is curious.    Of the 3 "steps," the first one is identity verification which is currently overloaded. The 2nd step says "completed" because they already have my bank account info.  The third step I can't get to yet. 

    They may need more documents in the "processing" progress thing at the top, I can't click that yet either.

    Then once I created a username/password: 

    0Reply
  • Account Closed
    OP
    Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
    6y

    Finally got the identity verification to work, clicked a big green button to send it for processing.  This may be when they request more docs...  

    1Reply
  • Account Closed
    OP
    Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
    6y

    Update!

    I got an email about 24h after submitting the above saying I was approved. Thus I guess the initial email was not actually an approval. 

    There were no additional requested documents, the only thing left to do was sign the closing documents.  Clicking the button to start that took me to an e-doc-signature website that probably any real estate investor will be familiar with.   I downloaded the PDF and read before signing it.

    I am not an attorney, but here's what I believe it says: 

    - I can only use the loan proceeds for the actual economic injury, so in my case it would be nonpayments of rent, etc.   

    - The loan amount was over 25k, so it is secured. However, it appears that it secured against my personal property, accounts and other things I use for my business. Because I am a BRRRR guy that does almost all work myself, I guess this would mean all my tools, work vehicle, etc. They never asked me for any documentation of my properties, nor was there a mortgage attached, so I don't think it is a direct lien on my rentals or home, but not sure.

    - The loan would be distributed based on the needs of the SBA and may be in increments. 

    There was also a document inserted about lobbying activities, and an equal opportunity employment notice in both english and spanish. 

    I clicked the "sign" button, and that was it. I went back to the main page. No message rather or not a deposit would be made to my account, no feedback on if there are any additional steps.  I have no idea what happens next, if the full amount will be deposited or just an increment. 

    I will keep an eye on my bank account and update!

    Here are some more screenshots of the email I go and the loan agreement.  There was also a "note" seperate from the agreement that I didn't bother screenshotting because 1) I am lazy and 2) it looked like it had the same terms as the loan agreement. 

    Here's the email I got saying I was approved:


    When I logged in, the portal had changed to enable signing the closing documents.. It looks exactly like the previous screenshots except that button was enabled. Skipping that screenshot...

    Here is the loan agreement, with all the terms included. I censored out my name and the amounts. As I noted before, this was followed by a statement about lobbying, fair employment, and then the actual note which had the same terms as the agreement.

    3Reply
  • Account Closed
    OP
    Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
    6y

    Looks like the attachments were minimized a bit in the forum, if you click them you can read all the text. 

    If anyone has any thoughts or comments about those terms let me know! I will update when something happens. 

    0Reply
  • Will C.
    Rental Property Investor · Richmond, VA · Member since 2016 · 279 posts · 133 votes
    6y
    Originally posted by @Account Closed:

    Looks like the attachments were minimized a bit in the forum, if you click them you can read all the text. 

    If anyone has any thoughts or comments about those terms let me know! I will update when something happens. 

    Thanks Nicky for this post. This cements the info the SBA rep told me on the phone about what is supposed to happen post-1k advance. Credit pull>email to set up web portal>verify id>review and sign docs

    just waiting for my email and credit pull now.

    0Reply
  • Shefali Rai
    New York City, NY · Member since 2015 · 23 posts · 9 votes
    6y

    Thank you so much @Account Closed for sharing this very valuable information in so much detail. Appreciate it! Two questions - 1. Did you have to submit any tax returns or other financial information to get approved? 2. Did you apply via multiple LLCs? If yes, did you receive a consolidated loan across LLCs or for one LLC only.

    Thanks again. We will all have the benefit of your experience with the EIDL process. 

    0Reply
  • Evan Bonnell
    Investor · La Salle, IL · Member since 2014 · 43 posts · 28 votes
    6y

    @Account Closed Thanks so much for taking the time to upload this!

    Looks like we should have our CPA's take a look at the terms and conditions to make sure we plan utilization of funds properly and prepare for potential audit.

    If I get the loan, I was planning on using for business expenses such as mortgage payments, RE taxes, etc. Is this allowed or can I only use it to offset missed rent payments?

    0Reply
  • Whitney HuttenPro Member
    Investor · Boulder, CO · Member since 2016 · 1k+ posts · 1k+ votes
    6y

    @Account Closed Thank you for sharing.  How long was it between receiving the grant and then doing the loan app?

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  • Account Closed
    OP
    Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
    6y
    Originally posted by @Shefali Rai:

    Thank you so much @Account Closed for sharing this very valuable information in so much detail. Appreciate it! Two questions - 1. Did you have to submit any tax returns or other financial information to get approved? 2. Did you apply via multiple LLCs? If yes, did you receive a consolidated loan across LLCs or for one LLC only.

    Thanks again. We will all have the benefit of your experience with the EIDL process. 

    When I applied I just used my SSN. I do have LLCs but when my CPA does my taxes its all reported under my own SSN so I figured it was best to use that.

    I have provided no documentation at all so far. I used the EIDL application that was basically a series of webforms that ask very basic financial questions.  I can back up my numbers if they needed more detail but no detail, proof or documentation was ever requested.

    However, I havent been funded yet. I just signed the docs last night and there has been no further guidance on what happens next.

    I dont know if this loan is like a line of credit I can draw from if necessary or if they just drop the full amount once the paperwork clears... i will update when I know more..

    0Reply
  • Account Closed
    OP
    Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
    6y
    Originally posted by @Whitney Hutten:

    @Account Closed Thank you for sharing.  How long was it between receiving the grant and then doing the loan app?

    I never got any email confirmation when i originally submitted, so I dont know the exact date. If my memory serves they announced the program on a Thursday or Friday and I think I applied the very next Monday, so it was almost immediately after it was announced.
    0Reply
  • Ramon Flores
    Rental Property Investor · Los Angeles, CA · Member since 2016 · 172 posts · 122 votes
    6y

    Does so this EIDL loan mean we can ONLY use the funds for the properties that have been affected? 

    0Reply
  • Account Closed
    OP
    Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
    6y
    Originally posted by @Ramon Flores:

    Does so this EIDL loan mean we can ONLY use the funds for the properties that have been affected? 

    I think so. I just realized I left off the most important page of the agreement. This is the 2nd page which specifies how I can use the proceeds.   I do not want to make any interpretations myself since I am not trained in interpreting these documents but my laymans hunch is that you are correct. 

    1Reply
  • Ramon Flores
    Rental Property Investor · Los Angeles, CA · Member since 2016 · 172 posts · 122 votes
    6y

    @Account Closed Thank you! I couldn’t find any info on the other pages you uploaded.

    It says that funds are used to “alleviate economic injury due caused by disaster...”, in my opinion this is broad.

    I guess when I get my EIDL loan I will use it as reserves and I move my current reserves into my active investing account.

    0Reply
  • Jonathan W.
    Kansas City, KS · Member since 2018 · 67 posts · 70 votes
    6y

    @Nicky Reader

    You will not be able to sell any assets with out sba approval according to your terms. Tools, cars, materials, house etc. Until the loan is paid back. That includes anything you buy now on also.

    Jon

    0Reply
  • Account Closed
    OP
    Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
    6y
    Originally posted by @Jonathan W.:

    @Nicky Reader

    You will not be able to sell any assets with out sba approval according to your terms. Tools, cars, materials, house etc. Until the loan is paid back. That includes anything you buy now on also.

    Jon

    Yeah I can see that interpretation.. My plan (if any money actually appears) is to stick the whole thing in reserves and wait to see what happens. It also means I can be a lot more relaxed with tenants going through issues right now.  

    If I don't get clear guidance from the SBA on what their expectations really are, a year or so I'll probably sit down with my accountant and figure out what to do next.  

    If someone gives me a big chunk of money, I will try and do my best to be honest to the terms we agreed to. 

    1Reply
  • Holly Qu
    Rental Property Investor · FL · Member since 2018 · 9 posts · 8 votes
    6y

    My process was the same as Nicky's. Signed docs yesterday, funded overnight. It is working!

    1Reply
  • Sharon Rosendahl
    Investor · Quilcene, WA · Member since 2017 · 230 posts · 169 votes
    6y

    Thank you for all the information. I have received the $1000 advance and had my credit checked but nothing else. I was curious what the terms of the loan would be. It doesn't look like it is too specific. ie, I had storm damage to a roof. My insurance deductible is $1000. Is this considered opex or is it considered capex and not acceptable? Also, it doesn't seem to be too specific about can I use only what any tenant shorts me? So if I get 25k but have a tenant not pay $1000 then I can only use $1000 since everyone else paid? or can I pay opex like unit utilities even if the tenant has paid therefore keeping my reserve to spend as I wish? I hate vague contracts.

    0Reply
  • Account Closed
    OP
    Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
    6y
    Originally posted by @Sharon Rosendahl:

    Thank you for all the information. I have received the $1000 advance and had my credit checked but nothing else. I was curious what the terms of the loan would be. It doesn't look like it is too specific. ie, I had storm damage to a roof. My insurance deductible is $1000. Is this considered opex or is it considered capex and not acceptable? Also, it doesn't seem to be too specific about can I use only what any tenant shorts me? So if I get 25k but have a tenant not pay $1000 then I can only use $1000 since everyone else paid? or can I pay opex like unit utilities even if the tenant has paid therefore keeping my reserve to spend as I wish? I hate vague contracts.

    Make sure you click all the buttons on the SBA portal, you have to confirm the amount, and also verify the banking info and then click the button to sign the documents. If you already did all that and you are still waiting for funding, you and I are in the same boat. 

    I am as confused as you are about how to stay compliant. For example, before COVID hit, I won a courthouse foreclosure auction and wired my 5k, right before the courts shut down and froze the process from moving forward.

    I was going to fund it with a cash-out refi non-QM loan from another property.. but with COVID that loan disappeared.  So eventually the court will open back up and confirm the sale, and I will need to pay up or lose my 5k deposit. I'm directly affected by COVID, but using this money to buy another property seems pretty shady if you just look at it that way....  I can still afford to close using unrelated funds that are more expensive than the terms of the EIDL loan, so it makes better business sense to use the EIDL loan.... 

    The whole process is basically just flying blind into a money storm.

    0Reply
  • Sharon Rosendahl
    Investor · Quilcene, WA · Member since 2017 · 230 posts · 169 votes
    6y

    @Account Closed They haven't offered me a loan yet but they sent the $1000 and pulled credit. Nothing but canned emails since. If I were to get it I would be worried I am violating something if I spend any more than any missing rent. That windstorm happened during the shutdown but obviously has nothing to do with the virus. I was  hoping that as the documents came out there would be some specifics in them but I guess not. 

    0Reply
  • Rudy Bello
    Investor · Vancouver, WA · Member since 2017 · 67 posts · 18 votes
    6y

    To the ones that have received the $1000 and credit pulled, did you received any generic emails from SBA first? I applied on 4/1, no money and no credit pulled. Just emails.

    0Reply
  • Account Closed
    OP
    Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
    6y
    Originally posted by @Rudy Bello:

    To the ones that have received the $1000 and credit pulled, did you received any generic emails from SBA first? I applied on 4/1, no money and no credit pulled. Just emails.

    I got no emails at all before (or for a while after) the initial 1000 deposit. Money just showed up and I didn't even notice until I went to do bookkeeping.  

    If you put "0" employees on your application you may not get the initial grant, it was 1000 x (number of employees)

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