Remember the EIDL loan? That is the Economic Injury Disaster Loan that you may have applied for in the middle of last year.
The payments for that loan are deferred for one year. The one-year anniversary for many early applicants is coming up, so the SBA is going back, dotting I’s crossing t’s, and getting ready for the start of payments.
You may receive a couple of different letters from the SBA.
The first letter you may receive is a servicing letter from the SBA.
This will likely come to your email and look something like this with an attachment:
It should come from the sba.gov domain. There should be a PDF attached that contains loan servicing instructions, including how to make payments.
It does not include your payment amount. That you will find in the loan documents, which you can find by logging into your SBA loan account here.
Log in using the email address that you used to register your account and the password that you created when you applied. If you don’t know your password click on forgot password, enter your email address and the system will send you a reset link.
The servicing letter also includes instructions on making a payment at pay.gov. You can pay through ACH, PayPal, or with a Debit Card. Click here to make a payment on your EIDL loan.
To make a payment you will need this information:
- Borrower name: This is the name of the entity that borrowed the EIDL money. It is likely the name of your company. You can find the name on your servicing letter or loan documents.
- Borrower address: The address of the entity that borrowed the EIDL money.
- SBA loan number: Find this in the servicing document or on your loan documents.
- The Payment Amount: You can find this on your loan documents.
You do not have to create an account to make a payment but if you do create an account you can schedule repeat payments so that you don’t have to think about this anymore. To create an account go to pay.gov and click on the nearly hidden: “create an account” link at the top right of the screen:
The second letter that you may receive is a request for more information about your loan
For any loan above $25,000, the SBA required that you guarantee the loan with your company assets and ensure those assets.
Specifically, the SBA requires that the borrower holds hazard insurance for a minimum of 80% of the business asset value. So, they may request evidence of insurance.
Many businesses do not have assets. In this case, the SBA seems to be accepting liability (Errors and Omissions) insurance.
The SBA may also ask you for a resolution from your board.
This resolution should confirm that the “Business held a meeting to confirm taking the SBA loan for the amount listed on the application, including the date of the meeting and that the person on the application has the authority to sign on their behalf and for the entity.”
If you have a board, you may need to confer a quick meeting and backdate the letter.
If you don’t have a board, the SBA still wants a letter. Their instructions, in this case, have been to create a document that states:
- You are 100% owner of the business.
- There is no board of directors.
- That you agree to the terms and amount funded by the SBA.
- You are authorized to sign on behalf of the business.
That should take care of the legalities.
Wait, what, can I still get an EIDL loan?
The upside of the EIDL loan is that it is a 30 year loan at 3.75%, which is a reasonable rate, it can be a lifesaver if your business needs the funds to function.
Would you like some help?
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