Economic Injury Disaster Loans (EIDL) Borrowers Beware of the Rewarded Whistleblowers!
It’s just not worth it! Whistleblowers are everywhere because they are protected and rewarded. So is accepting the loan without serious review really worth taking the money?
There are so many specific rules and regulations that many EIDL borrowers had failed to understand before accepting the loan which could put you in a situation to tell your client that their best course of action is to return the money immediately before whistleblowers report them.
As accounting professionals, we want to help our clients do the right things with managing their finances and sometimes we have to say the things they don’t want to hear but need to be said. If your client has accepted or is considering to apply and accept the EIDL, your eagle eye and mother’s concerning voice should be used when consulting your client.
So besides recommending that your client read all the details carefully and suggest they consult an attorney if needed, it’s important for you to know some of the important points like these: (just to name a few)
- Businesses can’t take out dividends for over 30 years if they received an EIDL loan and do not repay it in full.
- There’s fine print about a collateral agreement in the application for loan amounts greater than $25,000.
- EIDL applications are still being accepted but the $10,000 advance on the loan that could be considered a grant, is no longer available.
- All EIDL borrowers’ private details will be available in the public records because of the Freedom of Information Act, enumerated at 5 U.S.C. § 552. Violating a loan covenant can cause the interest rate on that loan to increase or even cause it to be considered in default.