AmiSight 10/13: SBA Approving $2 Million EIDL Loans Like a Bunch of Drunken Sailors
I am not surprised to report that the SBA has begun to approve and fund the larger EIDL loans up to $2 Million. I do not have beef with the idea of issuing these loans up to $2M to borrowers who the Pandemic has badly impacted. These businesses need the money to recover and survive. However, I am concerned about issuing these loans now for companies that have survived and thrived during the Pandemic.
Over the last few days, I have met and spoken with borrowers who had their most profitable year in the history of their companies last year and are now having large EIDL loans wired into their accounts. These loans are not a surprise, as the SBA does not require any proof of economic injury to get these loans.
It feels that the SBA Administration is acting like a corporate department rushing to spend their budget in the last quarter of the year because they don't want to look bad that they didn't spend it. This activity should not happen in corporations, and it should especially not occur in our government.
Borrowers who take EIDL loans should pay close attention to the rules about what they are allowed to use the money for. Ultimately, a percentage of borrowers will be audited, and you don't want to find yourself on the wrong end of that stick.