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  • Ami Kassar

AmiSight 8/26: For One Entrepreneur, an EIDL Loan Becomes a 1000 Pound Gorilla

Earlier this week, I spoke with an entrepreneur whose B2B business is growing rapidly and is expected to double over the next year.


This situation would be simple to solve in the ordinary course of business. The entrepreneur needs an Asset Based Line of Credit that will grow with his business as their Accounts Receivable and Inventory will grow.


Here is the trick in the situation. The business recently received a $2M EIDL loan, and while most of the money is in the bank, it's cheap long-term money, and he doesn't want to get rid of it.


That's all good and dandy, but his new problem is that any new lender will insist on a subordination agreement with the SBA before issuing him a loan. And this process promises to be messy and have an uncertain outcome for him.


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