How to Spend the EIDL GRANT, EIDL LOAN and the PPP| What You CAN and CANNOT Spend It On

Today, let’s discuss how to spend the PPP, the EIDL Loan, or the EIDL Grant - let’s dive into what you can and cannot spend these funds on and how to get the PPP forgiven.
➢ SUBSCRIBE!: shorturl.at/ilOW7
➢ Get the “Bad A** Mother*****R” Name Plate HERE: https://amzn.to/2XpuzTp

With the Cares Act, there have been a variety of new programs and stimulus packages introduced to business owners, sole proprietors, and independent contractors. But, with this new money, there are guidelines on how you can and cannot spend the money….this means, unfortunately, you cannot spend the money on a new Lamborghini or Ferrari (sorry).

So, let’s dig into what the specifics are of these funds and how you can spend these funds to ensure you are using these stimulus packages as they were intended.

First, let’s talk about the EIDL Grant and the EIDL Loan - the grant is the “cash advance” or “free money” portion of this package, the loan is the portion you have to pay back regardless of how you spend it.

With the EIDL, the grant and the loan were intended to be used for either financial obligations or business expenses that would have been able to be paid had the pandemic never occurred. So, things like rent, insurance, phone bills, car payments for company vehicles...etc. These are all permitted uses. While the terms of the EIDL are quite broad, a good rule of thumb is that the funds are to be used to keep business running as usual - to keep your business afloat and to keep your doors open. The funds were not intended to grow or expand the business, and that goes for both the grant and the loan portion of the EIDL.

Now, for the PPP - the PPP is much more strict on what you can and cannot spend the funds on and there are also timelines implemented in the PPP on how long you have to spend the funds. First, let me note that there is expected to be a new bill being introduced that changes the PPP and all the information I am laying out is from the new bill.

With the PPP, you have to spend 60% of the total funds on payroll costs and the other 40% can be spent on a handful of expenses including mortgage interest payments, rent, and utilities. You also have to spend these funds within 24 weeks, you have to hire back the same number of staff members by the end of June (but not necessarily the same exact people), and you have to keep the pay rate the same. All of this and more is what is taken into account when applying for forgiveness with the PPP, and whatever is not spent on the correct categories or in the correct ratio has to be paid back at an interest rate of 1% and a 5-year term.

Now, what if you have the PPP and the EIDL Grant? Well, this complicates things a bit - if you got the PPP and the grant, then your grant will be deducted from the loan. For example, if you got a $30,000 PPP loan, and then you got a $5,000 EIDL Grant - you do not get a total of $35,000 free money. You instead only get $30,000 of free money because the EIDL grant portion will be deducted from the forgiveness of the PPP.

If you are someone who received both the PPP and the EIDL Loan, then the forgiveness of the PPP will not be affected as long as you don’t spend these two funds on the same thing. Meaning, you cannot spend the EIDL on payroll or else you risk affecting the forgiveness of the PPP.

Lastly, what if you got an EIDL before April 3rd and then got the PPP? If this is the case for you, and you received the EIDL before April 3rd and used those funds for payroll costs, you will need to most likely refinance that EIDL loan through your PPP loan. How this works is that you will most likely need to contact the SBA or your bank, apply for refinancing and then you will get a larger PPP, you can then use those extra funds to pay the EIDL back - but this only works if you got the EIDL before April 3rd and used it on payroll costs.

I hope that this provides you some valuable insight on what you can and cannot spend the EIDL Grant, the EIDL Loan, or the PPP on - I know that this entire process can be extremely confusing and daunting, so hopefully I provided some clarity. Make sure to hit that LIKE button and SUBSCRIBE button, and I will see y’all in the next video.

SBA HOTLINE PHONE NUMBER: 1(800)-659-2955
SBA HOTLINE EMAIL: disastercustomerservice@sba.gov
GET MY PAYMENT: https://sa.www4.irs.gov/irfof-wmsp/notice

➢ Music Found Here: https://www.bensound.com/

Sources:
https://www.omm.com/resources/alerts-and-publications/alerts/sbas-paycheck-protection-program-and-economic-injury-disaster-loan-program/#:~:text=A%20borrower%20can%20also%20refinance,amount%20on%20the%20PPP%20loan.
https://www.forbes.com/sites/brianthompson1/2020/05/20/sba-approving-economic-injury-disaster-loans-eidls-what-you-need-to-know/#655477916120

#EIDL #Stimuluspackage #Grant

I am not a CPA, attorney, lender, or financial advisor. The content in these videos should not be construed as tax, legal, or financial advice...etc, and may be outdated or inaccurate;

Видео How to Spend the EIDL GRANT, EIDL LOAN and the PPP| What You CAN and CANNOT Spend It On канала Aubrey Janik