Sutton says the abandonment of the personal guarantee for loans under $200,000 should be reflected in the contract. “If the government were at the top, they would change the document,” Sutton says. It recommends that borrowers add their own type of endorsement, which states that since the loan is less than $200,000, there is no personal guarantee. (Caveat: This does not seem possible to do with the platform that the SBA uses.) Although the most flexible aid programs, there are some important restrictions to consider. When you signed your loan agreement, you certified that eidl funds were not being used for: millions of small entrepreneurs who obtained a loan through the Economic Injury Disaster Loan (EIDL) program were unloaded to be approved for one of these low-interest loans through the Small Business Administration (SBA). But some experienced borrowers, who have carefully checked their loan contracts, have objected to seemingly incriminating provisions imposed on borrowers, including confusing and contradictory language about personal guarantees. “Within 12 months of the date of this credit authorization and agreement, the borrower will provide proof of active and factual risk insurance, including fire, lightning and extended coverage, for all items used to secure this loan, at least 80% of the insurable value. The borrower will not terminate this coverage and will maintain this coverage for the duration of the loan. At the end of the day, there is no defined requirement for the business account from which you spend the money. Just track all eligible expenses you can allocate to the IEDDH. It is up to you to declare for yourself what activities you used the EIDL funds for, while you are in possession of the loan if the SBA invites you to do so. This problem with the personal guarantee language in the FDI contract can split like hair, but it shows how important it is to read credit contracts for small businesses before signing them. It`s not always easy or enjoyable, but it`s important.
No legal expert? Most of us are not. So if you commit your business or yourself to repay thousands of dollars, it`s a good idea to have a small business lawyer who can help you review the agreement. All right. In addition, it stipulates that neither the borrower nor if the loan is a business, the one who owns more than 50% cannot be reprehensible on the order of the court order or custody. So make sure they are not a problem. If you use that money, okay, how do you document the use of that money for SBA purposes? Also, these are very detailed requirements that I very hard to believe that the SBA can ever do on a broad basis. However, if you are the lucky one who has decided to review your loan, this is what you need to know, what you need to have on hand. For the last three years, the borrower receives proof of the last payment of the loan.