Since the realization of Covid-19’s significant economic impact, the SBA stepped up immediately to help small business owners and entrepreneurs across the country with both its fast PPP loans and its slower, EIDL loans. While the PPP loans have become water cooler talk and are being discussed everywhere due to its loan forgiveness aspect, the EIDL loans have flown mostly under the radar.
It’s no secret that the Small Business Administration (SBA) always comes with an enormous amount of strings attached when acquiring funding and it seems that the EIDL is no different. It looks like the SBA snuck in a personal liability provision in the contract.
“Each individual or entity acknowledges and accepts personal obligation and full liability under the Note as Borrower.”
Think twice before accepting the EIDL loan and always consult both your legal and financial advisors to determine what is best for you. The last thing you want to happen is to accept the funds and still go under, leaving you personally liable for the newfound capital.