Title: 5 Ways You Can and Can’t Use Your EIDL Loan | Nav
Headings: 5 Ways You Can and Can’t Use Your EIDL Loan
5 Ways You Can and Can’t Use Your EIDL Loan
PPP Applications are Now Being Accepted
How EIDL Funds May Be Used
How EIDL Can’t Be Used
1. Can I Use EIDL Funds to Pay Myself?
Verdict: Yes, but only for working in your business
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2. Can I Use EIDL to Pay Off Debt?
Verdict: Yes, but not to refinance long-term debt
3. Can I Use EIDL to Start a New Business?
Verdict: Not likely
4. Can EIDL Be Used to Buy a Vehicle or Home?
Verdict: Not likely
5. Can an EIDL Cover My Rent/Mortgage?
Verdict: Yes, likely if used for business expenses
Is There a Deadline to Spend EIDL Funds?
How Do I Document How I Used EIDL?
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Content: “I’m wondering if there is a limit on how much we can ‘repay’ ourselves with this loan for lost wages?” It seems clear you can’t pay yourself unless it’s for work you do in your business. After all, t he SOP states that EIDL can’t be used to pay: “ Disbursements to owners, partners, officers, directors, or stockholders, except when directly related to performance of services for the benefit of the applicant.” But if you continue to work in your business, paying yourself is a reasonable use of these funds. If you continue to work in your business, it may be helpful to use what you’ve paid yourself in the past as a guide to how much you can pay yourself. For those who don’t pay themselves a salary, you may want to look at what you have taken out in the past as owner’s draw, disbursements, or as profits. ( All of these must be related to work you’re doing for the business.) Borrowers getting Paycheck Protection Program (PPP) loans who are self-employed, for example, use their net profit on Schedule C Line 31 and divide it by 12 to determine their average monthly payroll. It’s reasonable to assu