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How To Determine If Your EIDL Loan Is Forgivable

COVID stimulus programs have all closed. Now it's time for small business owners to think about repayment, forgiveness, and deferments for SBA loans and grants.

    Erica Seppala
  • UPDATED

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Erica Seppala

Erica Seppala

Expert Analyst & Reviewer at Merchant Maverick
An expert in accounting, finance, and point of sale, Erica has been researching and writing about all things small-business since 2018. Erica's insights into personal and business finance have been cited in numerous publications, including MSN, Real Simple, and Reader's Digest. She is a graduate of Limestone College.
Erica Seppala
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144 Comments

Responses are not provided or commissioned by the vendor or bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the vendor or bank advertiser. It is not the vendor or bank advertiser's responsibility to ensure all posts and/or questions are answered.

    debbie millero

    i applied for the eidl but was confused because the first responses i received from sba was a “grant” therefor i applied and then it turned into a “loan” so being desperate as a small town florist i,
    after 3 letters to gov. wolf was told to shut the doors so 3 months of this about put me under as i used up savings to pay rent and all other expenses, as closing doors didnt stop the bills. Lendistry is the lender and i do not know where to go to apply for forgiveness on this as i would not have considered a loan at the time, im stretched o the limit as it is, who should i contact about forgiveness? sba as it stated a grant in the communications then a loan?

      This comment refers to an earlier version of this post and may be outdated.

      Jessica Dinsmore

      Hi Debbie,

      This one has us a bit stumped — You’ll need to review any and all documentation that was received during the application and approval process. We haven’t heard of any instances where there was a bait and switch type situation. We would recommend you contact the SBA directly at 833-853-5638 or email [email protected] to get more clarification on the situation. Best of luck to you Debbie!

        Tenisha Denise Munn

        My business is closed permanently, do I still have to pay back my EIDL Advance?

          This comment refers to an earlier version of this post and may be outdated.

          Jessica Dinsmore

          Hi Tenisha,

          EIDL loans cannot be forgiven, however, EIDL grants (advances) are automatically forgiven, provided you used the funds on approved expenses.

            This comment refers to an earlier version of this post and may be outdated.

            jim

            U Think the EIDL loans can be forgiven in the future. And why are most of loans been forgiven. and not eider Thank u

              This comment refers to an earlier version of this post and may be outdated.

              Jessica Dinsmore

              Hi Jim,

              It’s highly unlikely that the EIDL loans will be forgiven. These were always intended to be repaid and offer very favorable repayment terms. The SBA offers many different types of funding options–some are forgivable but most aren’t. With that said, if making the payments on an EIDL has become a hardship, borrowers are encouraged to reach out to the SBA for clarification on all possible repayment options. Best of luck!

                This comment refers to an earlier version of this post and may be outdated.

                Kim Cheeseman

                What happens if I can’t repay my EDIL, which I can’t

                  This comment refers to an earlier version of this post and may be outdated.

                  Jessica Dinsmore

                  Hi Kim,

                  I’m so sorry to hear that you are in this situation. It’s really important for you to know that communicating with the SBA is key — Avoiding the issue will only make things worse. We have a post that I think you’ll find helpful, SBA Loan Default: What Happens When You Default & What You Can Do About It Best of luck to you, Kim!

                    This comment refers to an earlier version of this post and may be outdated.

                    Rhonda

                    I rec’d my EIDL funds in 2020, with the repayment to begin in June of 2022. If I can…is it smart to repay the loan in full OR should I make the payments. If I do the latter do those EIDL funds need to be used in specific ways. ?

                      This comment refers to an earlier version of this post and may be outdated.

                      Jessica Dinsmore

                      Hi Rhonda,

                      There are no penalty fees for paying off your loan early, so if you can, go for it! Otherwise, EIDL funds are to be used to cover your business’s day-to-day expenses. Your loan can be used as working capital to cover a number of business expenses, including but not limited to payroll and benefits, utilities, rent, and fixed debt payments. There are a handful of restrictions surrounding how EIDL funds are spent. You can’t use funds for dividends or bonuses, expanding facilities, relocating, or acquiring fixed assets. Hope that helps!

                        This comment refers to an earlier version of this post and may be outdated.

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