According to our recent survey, over 50% of businesses are still waiting on an EIDL decision or are in reconsideration. Only 20% have been approved and are not seeking any more funding. Whether you have received your funds or are still waiting, what you do once you receive your EDIL loan is critical. Here are seven necessary steps to take once you get your money.
📌 Important Pro-Tip: If you want to get personalized assistance with your EIDL application– with reconsideration, collateral requirements, or getting approved, book a time to speak with a member of our team. There is currently a waitlist of over 4K people, but you you can skip the wait list with this invite link. We just opened up 10 more spots this week that we expect to fill up shortly.
Account for Your EIDL Deposit
The very first step to take after you receive your EIDL funds is to account for the deposit. If you have a bookkeeper, notify your bookkeeper that you received the money. While your deposit will appear on your bank statements, tracking it in your accounting or bookkeeping software is best practice.
If you are a sole proprietor or independent contractor and do not have a separate account for your business, this is especially important. In the event that you are audited, you will need to clearly demonstrate how this money was used (discussed below). The best practice is to open a business checking account and keep your business financials separate.
Record Your EIDL Amortization Schedule
After you account for your deposit, record your amortization schedule. The SBA will provide you with the date that your loan payments will begin, the monthly payments that will be due, and the payoff date. You or your bookkeeper need to record your amortization schedule so it is accounted for in your budget and your payments are tracked when it comes time to repay your EIDL loan.
Plan Out Your EIDL Expenses Ahead of Time
Plan out exactly what you are going to use the funds for. Remember, there are legitimate ways to use your EIDL funds as well as ineligible expenses to avoid. Planning out ahead of time what you will use your EIDL funds on and when can help ensure you spend it wisely. Prioritize your business needs and use your EIDL funds for the most important operating expenses first.
Carefully Track Your EIDL Expenditures
This goes hand-in-hand with the previous step. Once you begin using your EIDL funds, you or your bookkeeper need to notate on your bookkeeping software exactly what the EIDL funds were used for and when. If you are audited, you will need to illustrate that your EIDL funds were used for eligible expenses, such as working capital, payroll, etc.
Negotiate Prices With Your Vendors
Once you have your EIDL funds, you can make it last longer by re-negotiating prices with your vendors. Some vendors reward loyal customers or large purchasers with price reductions. Other vendors offer discounts if you buy certain items in bulk. Even if they do not reduce their prices now due to supply-chain delays and inflation, they may in the future.
Use Your EIDL Funds to Focus on Growth
EIDL funds cannot be used to expand your business, but marketing and other regular operating expenses are allowed. Once your normal operating expenses are covered, try to increase your marketing budget. If you do not have a website, now's the time to get one. If you have a website, focus on growing your web traffic. Utilize other marketing channels to grow your customers base so you can pay off your debt early.
Plan to Pay Your EIDL Loan Off Early
30 years of working capital is handy, but the interest accrues the moment your loan is deposited, and it adds up quickly. Depending on the size of your EIDL loan, you could be paying thousands of dollars per month in interest alone. Use what you need to sustain your business, but aim to pay it off as soon as you can. Paying your loan off in 10 or 15 years (rather than 30) will save you tens of thousands or even hundreds of thousands of dollars in interest.
Get Personalized EIDL Help
If you want to get personalized assistance with your EIDL application– with reconsideration, collateral requirements, or getting approved, book a time to speak with a member of our team.
There is currently a waitlist of nearly 4,500 people, but you you can skip the wait list completely with this invite link. In addition to one-on-one assistance, you'll be able to use the cash flow analysis calculator to see what your actual EIDL approval amount might be.