So you took an EIDL and need more financing... Now what?

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The question many small business owners across the country find themselves asking... How will the EIDL debt servicing reflect in underwriting decisions when these businesses are applying for other commercial debt?

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Months to a year after the COVID-19 Government imposed lockdowns 4 million US small businesses received the EIDL. The vast majority of these EIDL recipients never before received any SBA money for their business. So how will these SBA loans affect these businesses going forward? "Does it matter if I received the EIDL?” This is the common question we are receiving from small business owners.

The short answer is YES, the EIDL repayment liability will affect the underwriting for additional business debt. The EIDL is a 30 year note, which needs to be paid back. When an underwriter is reviewing a small business’ ability to repay a note, current debt servicing is accounted for. SO, the debt servicing of the EIDL will be taken into account.

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