Q: “What specific costs are covered/allowed under the EIDL? Can I use the EIDL, for example, to reimburse myself for current bills that are auto-deducted from my bank account/paid by credit card, or does this require a different type of payment transaction?”
June 16, 2020
Authored by Aria Eckersley
Under the EIDL program, loan funds can be used for a wider range of expenses than under the PPP, including fixed debts; payroll; rent or mortgage payments; and other bills that can’t be paid due to the economic impact of the pandemic. A new/separate bank account is not required to use EIDL funds (although it makes recordkeeping easier). Borrowers should keep records of any bills or transactions for eligible expenses for which the loan funds are used. For example, if a borrower has a bill that cannot be paid due to the economic impact of the pandemic, and that bill is typically auto-deducted from a credit card account, the borrower can make a credit card payment for that amount with EIDL funds that have been deposited into a checking account. Borrowers should keep detailed records of these transactions if EIDL funds are used to make that payment, recording the amount of each bill or expense, the date the borrower was charged, and any receipts/invoices or records of payment.