It is your identity and your hard work. However, youcannotuse you SBA loan to pay off your personal debt, such as credit cards, mortgage or other debts. The SBA Designates Proper Uses of Funds
People also ask
Why can鈥檛 I use my SBA loan to pay off debt?
Money used to pay your personal debts should be claimed as income and therefore income taxes paid thereon. However, if you use your SBA funds to pay your personal debts, you receive income tax free. The other reason for the restriction surrounds the primary goal of the SBA program to help small businesses and create jobs.
Can a small business get a loan from SBA?
Businesses can use these for real estate, working capital, or equipment. The SBA doesn鈥檛 lend this money directly to businesses. Instead, a bank or financial institution provides the loan, and the SBA backs (guarantees) a certain amount of it.
How do I make a partial payment on an SBA loan?
The loan is between the borrower and SBA directly. Partial Payment Instructions: If you want to make a partial or installment payment, please pay using this 1201 Borrower Payment form. Enter your 10-digit EIDL Loan Number in the SBA Loan Number field and the amount you would like to remit as payment.
Do you have to sign a personal guarantee for SBA loans?
Borrowers owning 20% or more of the business and individuals that hold key management positions are also required to sign a personal guarantee to obtain SBA loans. A personal guarantee is a written promise that says you agree to pay back the loan personally if your business cannot.