All Forum Posts by: CJ M.

The negativity is only directed towards people who are taking the money, but are not experiencing COVID hardship. Most landlords are collecting all their rents and flippers are selling houses in record time. The people I see on BP getting the money are saying they are using it to expand their business. That is not the intent and it would be a fraudulent use of the money.

To increase the processing speed, there was no vetting process. It was all given out on the "honor system". So the point is, just because you got it, doesn't mean you should have. They have already said they will be back auditing in the future and as this plays out, people who took money without needing it will be seen as villains in the crisis.

Most people know if they should have the money, so people asking if they should keep it are really asking, "will I get caught". Nobody ever thinks they will get caught. Just do the right thing and you will be fine.

Not everyone dude. Many are keeping in a separate account and either using it for emergency or will return it after the crisis is over. We have several tenants, in New York no less, which are playing the COVID game even though they have not lost their job or benefits. In fact, there is a eviction ban in New York, New Jersey and Connecticut until July (CT) and who knows for the other two States. No one knows what's going to happen when COVID-20 comes around in the Fall. You shouldn't just the mass by the actions of the few; especially as a mod.

It says on the loan website "If you have suffered substantial economic injury" and then goes on to say "Substantial economic injury means the business is unable to meet its obligations and to pay its ordinary and necessary operating expenses. EIDLs provide the necessary working capital to help small businesses survive until normal operations resume after a disaster."

No doubt many businesses have suffered major economic injury including some landlords like yourself. I guess I read the OP and didn't get the feeling there was any hardship. He referred to it as an opportunity to grow his business. Growing your business is different than a business that is unable to meet its obligations. That is all I meant.

Ahhh...that makes sense and I can see how you interpreted it that way. Let me clarify on my original statement when I said "How will it prevent me from growing my business?" What I meant by that is how would accepting this loan prevent me from growing through "normal" operations (i.e. WITHOUT using the EIDL directly for expansion/acquisition).

Disclaimer - for additional clarification: I was 100% impacted by coronavirus (tenant breaking a lease due to getting deployed in the military because of covid, tenants moving out without notice, multiple tenants quarantined with no income to pay rent, multiple tenants laid off/furloughed, and a tenant who's son was diagnosed with COVID). Those are just a few examples...

2 Votes

Originally posted by @Natalie Kolodij:

Note too that since it's over $25k

The SBA is collatoralizing all of your assets owned now, and acquired before the end of the loan.

You need permission to sell any of those assets- and we do not know what that process will incur/be.

What if it takes 6 months to get approval to sell one of your rentals?

Fair point. My rentals are all buy and holds. I guess in this instance it sounds like a person would either have to go through the approval process, or pay the loan back in full. This does bring up the question, what about selling future properties (that have nothing to do with the EIDL) that are held in a separate LLC?

0 Votes

@Calvin Thomas

This is very interesting Calvin. Unless I'm completely missing it, I don't see that language anywhere in the terms they sent me. The only language I see is:

"Borrower will not, without the prior written consent of SBA, make any distribution of borrower's assets, or give any preferential treatment, make any advance, directly or indirectly, by way of loan, gift, bonus, or otherwise, to any owner or partner or any of its employees, or to any company directly or indirectly controlling or affiliated with or controlled by borrower, or any other companies"

0 Votes

@Joe Splitrock

Thanks for the reply Joe. I guess my feeling is, whether somebody was impacted or not, I don't see any problem accepting the loan. Noone knows the future in the covid world. A smart investor is not going to wait until all h*** breaks loose before trying to secure this type of loan (especially considering it takes months to get approved). Heck, we're even hearing about a possible 2nd covid wave coming in the Fall. I'd rather rather prepare now, than assume I'll be ok.

Anyway, just my two cents

2 Votes

@Calvin Thomas

I agree, and I will not be using any of the loan for repairs anyway. But, for my own knowledge which section of the terms talks about the repairs? For some reason I don't remember seeing them.

0 Votes

@Calvin Thomas

I think what's a bit unclear to some is the "working capital" language. For example, if a person needs it to rehab a property in order to get it rent-ready? Or what if someone wants to put funds in an interest-bearing account until it was needed? Etc.

I like that they say, the money can be used the it best alleviates economic injury .. that sounds like it is pretty much left up to us to determine the best use since the owner of the business knows best what they need.

0 Votes

@Alex Olson

I agree. I'm just surprised there is so much negativity on BP about it.

1 Vote

I've been approved for a pretty sizable secured loan. I read the terms, spoke with seasoned investors, and spoke with SBA. Unless I'm missing something, it seems that taking this loan is a no brainer.

What am I missing? Does anyone disagree? What are the main cons? How will it prevent me from growing my business?

I only see a lot of opportunity/potential with this loan

5 Votes

@Linda Weygant

What if I purchased a property from using other funds. Can that property still be refinanced?

0 Votes

@Jay Y.

What section of the terms is that in? I don't recall seeing that language.

0 Votes

All Forum Posts by: CJ M.

CJ M. has started 52 posts and replied 1109 times.

Post: Why not take secured EIDL?

Post: Why not take secured EIDL?

Post: Why not take secured EIDL?

Post: Why not take secured EIDL?

Post: Why not take secured EIDL?

Post: Why not take secured EIDL?

Post: Why not take secured EIDL?

Post: Why not take secured EIDL?

Post: EIDL loans and purchasing fixed assets

Post: EIDL and physical repairs