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  • Writer's pictureAmi Kassar

AmiSight 10/20: Pay Attention to EIDL Fine Print

It's essential for everyone who has or is considering an EIDL loan to know and understand the fine print in the loan documents. Here are five key points to pay attention to.

  1. The SBA is allowed to inspect, make copies of, and audit any books, records, and papers relating to your financial or business conditions. The SBA is also allowed to inspect and appraise any of your assets. The SBA can do this themselves or force you to do it at your own expense.

  2. No later than three months after the end of each fiscal year, you have to provide the SBA with your financial statements. In addition, the SBA can ask that you accompany those statements with an ‘Accountant’s Review Report’ prepared by an independent public accountant at your expense.

  3. You may not sell or transfer any collateral used to secure the loan (except normal inventory turnover) without the SBA’s prior written consent.

  4. You must obtain and itemize receipts (paid receipts, paid invoices, or canceled checks) and contracts for all loan funds spent and keep these receipts for three years from the date of the final disbursement. You must provide the itemization and copies of the receipts to the SBA if they request it.

  5. You need written approval from the SBA before you make any distributions to any owner, partner, or employee.

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2件のコメント


Coleman McDonald
Coleman McDonald
2021年11月03日

Ami, on point number 5 . . . does that mean that all dividends, management fees, and distributions of any kind would have to stop? Or, do you read the language as more narrowly prohibiting distribution of the EIDL funds themselves (I recognize its a little of a soft point given the fungible nature of cash).

いいね!

Rebecca Schultz
Rebecca Schultz
2021年10月20日

I wish more people talked about these facts. This is where people trip and fall.

いいね!
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