# Sba loan



## Hsshafik (Jun 19, 2020)

Got approved for a 28k SBA disaster loan, as a Uber driver. What can I use this for? It seems like a lot of risky rules, seriously confused. Do I use it for my everyday like expenses as I usually would with my regular Uber pay outs?


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## RobLinn (Aug 10, 2019)

If it's the EIDL Loan then here's a handy reference of what you can spend it on

https://pursuitlending.com/resource...rogram-over-view-and-application-information/
You can use the funds to pay fixed debts, payroll, accounts payable and other bills that you would have typically been able to pay had your business not been impacted by COVID-19. The funds from these loans cannot be used to replace lost sales, refinance long-term debt or to expand.

I'm keeping a spreadsheet with whatever I spend it on showing it's being used for business (car payment, insurance payment, cell phone payment, repairs, purchases for business items)
Then once my PUA fed $600 runs out I'll post weekly payments to myself (payroll, sick day) & other miscellaneous expenses for Business

I have the cash sitting in a separate bank account & when I transfer to my spending account (Uber Card) I pay whatever

I'm still debating whether to return a portion of it in a lump sum "Early Payment" to lower the loan total but since payments are not due for a year I'm in no rush
Kinda handy to have in case I need tires or car repair in the future
Also the interest on the loan is tax deductible so it's almost free money


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## Hsshafik (Jun 19, 2020)

RobLinn said:


> If it's the EIDL Loan then here's a handy reference of what you can spend it on
> 
> https://pursuitlending.com/resource...rogram-over-view-and-application-information/
> You can use the funds to pay fixed debts, payroll, accounts payable and other bills that you would have typically been able to pay had your business not been impacted by COVID-19. The funds from these loans cannot be used to replace lost sales, refinance long-term debt or to expand.
> ...


Great idea. I was wondering if I could use it to open another business bc now ridesharing is scary with the covid risk, even with masks.. or could I potentially purchase another car with less mileage if I have to continue Uber?


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## DeadHeadDriver (Feb 7, 2020)

Hsshafik said:


> Great idea. I was wondering if I could use it to open another business bc now ridesharing is scary with the covid risk, even with masks.. or could I potentially purchase another car with less mileage if I have to continue Uber?


Two Part Answer, but keep in mind you are asking for advice from anonymous Internet Message Board regarding over $27,000 in personal liabilty....

A)-----NO! Both of those by definition are an expansion of your business. I read the article RobLinn posted for you. Here was the important part:










B)-----Do yourself a favor: Spend $75-$100 and 40 min. of your time to seek advice from your local tax professional or hire one. 
If was $2700 loan than advice is overkill. Being wrong to the tune of thousands of dollars in non-forgiveness could suck!!


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## Hsshafik (Jun 19, 2020)

Thank You. Wish I didn’t take this loan at all at this point. So many restrictions and a lot of gray areas. Will definitely reach out to my tax lady, didn’t think of that. Thanks everyone for the advice.


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## Atom guy (Jul 27, 2016)

You don't have to accept the whole amount. There are a lot more restrictions and rules for accepting $25,000 or more. Read the loan agreement carefully to see if you want all the rules that come with the full loan amount offered. As has already been said, put the money in a separate account so you can easily document how you spend it. I got $11,200, but I only plan to spend about 1/2 of that. The rest will sit in the account. The money is for "working capital." There's no requirement that you spend any of it. You could just leave it in the account and then pay the whole loan back next year if you wanted. But all these fools who plan on "investing" it in the stock market or other ideas are really taking a risk if they end up being the one the SBA comes after.


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## stanigu (Dec 8, 2016)

B)-----Do yourself a favor: Spend $75-$100 and 40 min. of your time to seek advice from your local tax professional or hire one. 
If was $2700 loan than advice is overkill. Being wrong to the tune of thousands of dollars in non-forgiveness could suck!!
[/QUOTE]

EIDL Loan is not forgiven. I think you're confusing it with PPP Loan.


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## RobLinn (Aug 10, 2019)

The EIDL is not taxable as it’s a loan
It’s basically working capital to be used solely for business related expenses (with some restrictions)
At 3.75% it’s not a bad loan as the interest accrued is tax deductible as a business expense
Just keep proper expense spending records & keep the principle as a rainy day slush fund (car repairs, car loan payments, vacation or sick days, after DUA/PUA payroll, etc.)
With no prepayment penalties it’s basically a personal line of credit with decent repayment terms

Handy to have the cushion of working capital 😉


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## _Tron_ (Feb 9, 2020)

Marked as most helpful responses to a thread for today.

*Hsshafik, there is probably some gray in the loan terms, along with the afore described black & white. I went pure B&W by using the funds for car payments and insurance.

But I suppose if I spent my Uber income on personals (rent, food, etc.), and used the loan money to pay my uber expenses (car payment, insurance, gasoline, car repairs, etc.), then that would likely still be pretty B&W. If I was going to push it beyond that it would only be if my financial situation demanded it.

I suspect a good tax person, whatever else they tell you, will also include a disclaimer that NO ONE KNOWS FOR SURE, because this is a new program and it remains to be seen as to how tightly the rules will be enforced.

I took the loan partially as a precaution against all hell breaking loose, to a degree *_*where*_* the way the funds are spent would be the least of my problems. With a potential huge bump in price inflation being a high probability, one would be paying back the loan with far cheaper dollars, well exceeding the 3.75% vig. ;>*



Hsshafik said:


> Thank You. Wish I didn't take this loan at all at this point. So many restrictions and a lot of gray areas. Will definitely reach out to my tax lady, didn't think of that. Thanks everyone for the advice.


If you do choose to return the money after you are funded you will have to keep the money in the bank for one year and then pay back the full amount (unless you call the bank now and see if the loan can be reversed. There is a several day period where a PPP loan can be nullified). Indications are you would have to pay the accrued interest for that year. On a 28k loan @3.75% that amounts to $525.00.

https://www.calculatestuff.com/financial/interest-only-calculator


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## Sal29 (Jul 27, 2014)

Hsshafik said:


> Got approved for a 28k SBA disaster loan, as a Uber driver. What can I use this for? It seems like a lot of risky rules, seriously confused. Do I use it for my everyday like expenses as I usually would with my regular Uber pay outs?


I would use the money to buy a used Prius Prime or Used Tesla Model 3 if you intend to keep doing ride share and sell your old car.


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## _Tron_ (Feb 9, 2020)

Sal29 said:


> I would use the money to buy a used Prius Prime or Used Tesla Model 3 if you intend to keep doing ride share and sell your old car.


Except capital purchases such as that are disallowed. ;<


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## Sal29 (Jul 27, 2014)

_Tron_ said:


> Except capital purchases such as that are disallowed. ;<


Why is it disallowed if it's a normal business expense that may have happened anyway if the Pandemic didn't happen?


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## _Tron_ (Feb 9, 2020)

Read the language of the law and/or the handful of interpretations on youtube. The limitations do not allow capital expenditures. For example with a traditional biz; you can repair an existing building. You cant buy a new building.


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## Sal29 (Jul 27, 2014)

_Tron_ said:


> Read the language of the law and/or the handful of interpretations on youtube. The limitations do not allow capital expenditures. For example with a traditional biz; you can repair an existing building. You cant buy a new building.


So if you already own a Prius, you can spend $10,000 to convert it into a plugin hybrid using SBA money then which will greatly reduce your cost per mile?
https://www.newschannel10.com/story/8579201/new-kits-turn-any-car-into-a-plug-in-hybrid/


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## _Tron_ (Feb 9, 2020)

No. That's a capital improvement. You would need to first drive the car at max speed and burn out the existing motor (could take years), then repair the damage by dropping in a new motor, which just would happen to have the plugin piece attached.


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## Atom guy (Jul 27, 2016)

I am 100% self employed between ride share and being a landlord. So my EIDL money is going towards my mortgage payments and car payments. That's it. I've got the money in a separate checking account to make the accounting easy


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## jeanocelot (Sep 2, 2016)

Hsshafik said:


> Got approved for a 28k SBA disaster loan, as a Uber driver. What can I use this for? It seems like a lot of risky rules, seriously confused. Do I use it for my everyday like expenses as I usually would with my regular Uber pay outs?


Someone I know very well got a $10K loan from the SBA; he ended up filing for bankruptcy and got it discharged.


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## 68350 (May 24, 2017)

Applying for a business loan, but not knowing what you will, or can, spend it on? Sounds like a bad idea to me. The EIDL is a multi-step process. Did you accept the actual loan already? Or are you just in the application phase? Request the loan advance of $1000?

Generally, rideshare business expenses. Grocery bill, personal expenses, no. This is a *business* loan. Read the rules. And why ask a bunch of Uber drivers? Consult a professional if you need to.


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## RobLinn (Aug 10, 2019)

yes the EIDL is a business loan with agreeable repayment terms that can be used for regular business expenses (Car repair, Car payment, insurance payments, other Uber related expenses, Payroll, Sick Days, etc)

it's Working Capital & as long as you keep records of what you spend it on your good

If you want to use it for personal then the Payroll expense is the way to go
(Example, Figure what 1 sick or vacation day would pay yourself personally & cash in 1 sick day paying yourself for it. Make the note in a spreadsheet & it's good)

Also you can reimburse yourself for business expenses you paid during your time under the COVID19 shutdown you placed yourself in (Made a Car payment in April & May? Backdate the date of that payment & reimburse yourself)

proper record & accounting is key in case they audit (unlikely but possible)
Having a working capital reserve will help with business expenses that may arise (need tires or repairs? Boom it's there)

Bonus is the Interest on the loan is tax deductible &#128521;



68350 said:


> 68350 said:
> 
> 
> > Applying for a business loan, but not knowing what you will, or can, spend it on? Sounds like a bad idea to me. The EIDL is a multi-step process. Did you accept the actual loan already? Or are you just in the application phase? Request the loan advance of $1000?
> ...


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## New2This (Dec 27, 2015)

_Tron_ said:


> Read the language of the law and/or the handful of interpretations on youtube. The limitations do not allow capital expenditures. For example with a traditional biz; you can repair an existing building. You cant buy a new building.


I'm not being a troll here. Serious question.

I got the EIDL. Say my car dies or is totalled in an accident.

Would replacement of the car using EIDL funds be allowed?


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## DeadHeadDriver (Feb 7, 2020)

Car dies or Total-Loss in accident?
Both Allowed= "Normal biz expense to fix/replace destroyed asset." Due to C19 you are unable to cover either expense w/normal income.


NOT Allowed= Just flat-out buying new car or upgrading existing car because you have EIDL cash on-hand.


MAYBE?= Finally get those dual Truck Air Horns installed instead of your current wimpy honker when it 'gives-out'. 😄


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## Tony73 (Oct 12, 2016)

RobLinn said:


> I'm still debating whether to return a portion of it in a lump sum "Early Payment" to lower the loan total but since payments are not due for a year I'm in no rush.


You may have to pay it all back. Why would you call yourself a small business? How personal car payments would be justified if this isn't a personal loan?


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## Mrs Uber Bastid (Sep 23, 2019)

Tony73 said:


> You may have to pay it all back. Why would you call yourself a small business? How personal car payments would be justified if this isn't a personal loan?


And, so what if you did.
3% is almost free money.
I got relatives that won't loan me money at 3%.


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## Tony73 (Oct 12, 2016)

Mrs Uber Bastid said:


> And, so what if you did.
> 3% is almost free money.
> I got relatives that won't loan me money at 3%.


If you aren't a legit small business with employees and real business expenses you should not apply for this loan because the money isn't free to spend as you see fit.

100% once the virus goes away, whether it's 6 months or 2 years you'll have to report the expenses and if they aren't what you were supposed to spend on, guess what?

This is a federal emergency loan for legit small businesses, drivers are individuals, not businesses. The deli on the corner with 3 employees is a small business. Odds are there will be penalties for those taking advantage of the system. No crying to momma later. &#128347;


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## New2This (Dec 27, 2015)

Tony73 said:


> How personal car payments would be justified if this isn't a personal loan?


I applied through the SBA as an Uber driver. Didn't hide it. They gave me the money.

If I use the car for business purposes why wouldn't that be legitimate?


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## Atom guy (Jul 27, 2016)

Tony73 said:


> If you aren't a legit small business with employees and real business expenses you should not apply for this loan because the money isn't free to spend as you see fit.
> 
> 100% once the virus goes away, whether it's 6 months or 2 years you'll have to report the expenses and if they aren't what you were supposed to spend on, guess what?
> 
> This is a federal emergency loan for legit small businesses, drivers are individuals, not businesses. The deli on the corner with 3 employees is a small business. Odds are there will be penalties for those taking advantage of the system. No crying to momma later. &#128347;


This is going to vary from person to person.Yeah part timers with W2 jobs probably shouldn't apply, but full timers who are 100% self employed sure can.


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## RobLinn (Aug 10, 2019)

Tony73 said:


> You may have to pay it all back. Why would you call yourself a small business? How personal car payments would be justified if this isn't a personal loan?


&#129318;&#127995;‍♂
this is the problem with most rideshare drivers who don't understand what Self Employed means

if I am self employed then I (in the eyes of the law) am a small business (with 1 employee, myself)
The "Car Payment" is a Business expense as the Car is used solely for my rideshare business
The Loan is made to me personally but I personally allow my business to use the car for rideshare
Since the Business uses my car it pays for the financing of it
So yes we can pay our car payments (& other Business expenses) with a loan from the SBA EIDL program

too many think rideshare is personally using the car as an individual

It's a Business



Tony73 said:


> If you aren't a legit small business with employees and real business expenses you should not apply for this loan because the money isn't free to spend as you see fit.
> 
> 100% once the virus goes away, whether it's 6 months or 2 years you'll have to report the expenses and if they aren't what you were supposed to spend on, guess what?
> 
> This is a federal emergency loan for legit small businesses, drivers are individuals, not businesses. The deli on the corner with 3 employees is a small business. Odds are there will be penalties for those taking advantage of the system. No crying to momma later. &#128347;


Tell the IRS you are an individual instead of a business when filing your taxes & then get back to us after the audit

Being Self Employed is exactly the same as a Small Business

just because some of us understand this & whats required & keep proper accounting of the Business expenses & some are NOT does not mean we are not businesses

as for what we spend the money on & wether or not it's allowable under the Loan program is only the ingenuity of how you designate the expenses

It's creative accounting

see how far you can bend the rules without breaking them

for example

if your not collecting the PUA/DUA & want to cash out a few Vacation days (as some companies allow) then it's a simple factor of a Justifiable amount for those vacation days & a simple note on the expense report & boom. Paid vacation day cash &#129335;&#127995;‍♂


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## Tony73 (Oct 12, 2016)

RobLinn said:


> this is the problem with most rideshare drivers who don't understand what Self Employed means


You can't manipulate the actual truth to make it look right. It's the same as saying you deserved a promo over you colleague because you're hard working person, when you know the promotion belonged to someone else. Keep patting yourself in the back. It does not make a wrong right.


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## New2This (Dec 27, 2015)

Tony73 said:


> You can't manipulate the actual truth to make it look right. It's the same as saying you deserved a promo over you colleague because you're hard working person, when you know the promotion belonged to someone else. Keep patting yourself in the back. It does not make a wrong right.


It's legal according to the law

You want to change the law talk to your Congressman and Senator.


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## Tony73 (Oct 12, 2016)

> Tell the IRS you are an individual instead of a business when filing your taxes & then get back to us after the audit
> 
> Being Self Employed is exactly the same as a Small Business


Yikes!



New2This said:


> It's legal according to the law
> 
> You want to change the law talk to your Congressman and Senator.


Yes, denial comes before realizing your mistake.


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## New2This (Dec 27, 2015)

Tony73 said:


> Yes, denial comes before realizing your mistake.


What mistake?

I'm not an employee of Uber, at least the way things are currently structured.

The IRS considers me self-employed. A one-man business.

If the IRS says I am a business then I'm qualified for the SBA EIDL.

Again I was upfront about everything. I did my SS# and listed Uber with them. They pulled my credit AS AN INDIVIDUAL.

As long as you make the payments on time, with SO MANY applicants I doubt they're going to audit you unless you do something stupid.


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## RobLinn (Aug 10, 2019)

Tony73 said:


> Yikes!
> 
> 
> Yes, denial comes before realizing your mistake.


Denial is not just a river in Egypt

Even Uber has a page on eligibility for drivers & different government programs we are eligible for
Fun Fact: the EIDL is listed for self employed drivers &#129335;&#127995;‍♂&#128536;
https://www.uber.com/us/en/coronavirus/government-relief/Like I said before
Just because some drivers understand that we are self employed businesses & you don't doesn't mean we should not get the relief
As long as you keep proper accounting records (I'm using Quickbooks) your good to go &#128521;


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## akwunomy (Jan 12, 2020)

New2This said:


> I'm not being a troll here. Serious question.
> 
> I got the EIDL. Say my car dies or is totalled in an accident.
> 
> Would replacement of the car using EIDL funds be allowed?


No...you can't buy another car but if you want to fix the car...then you can use the money to do it..


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## NauticalWheeler (Jun 15, 2019)

I know it's on one of these threads already, but did you use your personal address as your business address

And your name as the business name, being as you are an IC?


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## New2This (Dec 27, 2015)

NauticalWheeler said:


> I know it's on one of these threads already, but did you use your personal address as your business address
> 
> And your name as the business name, being as you are an IC?


Yes to both for me.


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## NicFit (Jan 18, 2020)

So the principal payment of the car I currently own ok? Say I owe 20k on my car and I use it on that, that’s fine?


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## RobLinn (Aug 10, 2019)

NicFit said:


> So the principal payment of the car I currently own ok? Say I owe 20k on my car and I use it on that, that's fine?


No
That would be considered paying off a loan for a fixed expense which is not allowed


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## NicFit (Jan 18, 2020)

RobLinn said:


> No
> That would be considered paying off a loan for a fixed expense which is not allowed


What about paying myself a bonus for dealing with this Covid crap?

So I can use the money for the car payments but I can't pay into the rest of the car loan? That doesn't make sense, same bill, just paying furlture payments of it


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## _Tron_ (Feb 9, 2020)

New2This said:


> I'm not being a troll here. Serious question.
> 
> I got the EIDL. Say my car dies or is totalled in an accident.
> 
> Would replacement of the car using EIDL funds be allowed?


Seems under the intent of the law, that would be a justifiable expense. But it is also a gray area, as best I understand how the law is being interpreted. I suppose if that scenario came up for me I'd call the SBA and ask. They do answer the phone.

BTW - In my view folks perusing this thread should ignore all assertions made by Tony73. Sorry Tony, I just don't think your take on this topic is accurate.


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## RobLinn (Aug 10, 2019)

NicFit said:


> What about paying myself a bonus for dealing with this Covid crap?
> 
> So I can use the money for the car payments but I can't pay into the rest of the car loan? That doesn't make sense, same bill, just paying furlture payments of it


bonuses to the owner of the business is a No (specifically states no owner bonuses)
Cash in a vacation day or sick day yes (although if you are collecting PUA/DUA you have to report that as income & also income on your 2020 taxes)

a car payment is considered a Fixed Business expense payable (paying off the loan is paying long term debt which is against the EIDL rules)
Now, that's not to say you couldn't take your personal funds to pay a principal only car payment on top of the EIDL payment Which would pay down the principal (or say pay Car, insurance & Cell with EIDL then use personal funds to pay a principal payment on the loan)
Or if you've paid April, May & June Business expenses with your personal funds (PUA/DUA) list those on your accounting of EIDL payments on your spreadsheet & then reimburse yourself personally for those business expenses

creative accounting &#128521;


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## NicFit (Jan 18, 2020)

RobLinn said:


> bonuses to the owner of the business is a No (specifically states no owner bonuses)
> Cash in a vacation day or sick day yes (although if you are collecting PUA/DUA you have to report that as income & also income on your 2020 taxes)
> 
> a car payment is considered a Fixed Business expense payable (paying off the loan is paying long term debt which is against the EIDL rules)
> ...


But what if all the income I was going to make was going to go the principal anyway? That was actually the plan and right now the only bill I have is the car payment. I don't want a car payment anymore as I don't treat it as fixed expense and more of a temporary one since it does go away when I pay it off. I had no intention of paying in it for the full term when I got the loan, was just easier to deal with payments at first while I handled other bills but now they are gone and every penny I would of made would of went straight to car principal. If my business plan was this all along then shouldn't I have the option to follow it?

If I have no other bills and I can't use it for the principal then what do I do with it?


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## NauticalWheeler (Jun 15, 2019)

NicFit said:


> But what if all the income I was going to make was going to go the principal anyway? That was actually the plan and right now the only bill I have is the car payment. I don't want a car payment anymore as I don't treat it as fixed expense and more of a temporary one since it does go away when I pay it off. I had no intention of paying in it for the full term when I got the loan, was just easier to deal with payments at first while I handled other bills but now they are gone and every penny I would of made would of went straight to car principal. If my business plan was this all along then shouldn't I have the option to follow it?
> 
> If I have no other bills and I can't use it for the principal then what do I do with it?


How long after a cigarette do you begin having nic fits? For me, it's about an hour unless I'm doing something that has my full attention, like taking trips and making tips.

Sometimes it's as little as 20 minutes, like if I'm bored or on hold with the SBA.


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## NicFit (Jan 18, 2020)

NauticalWheeler said:


> How long after a cigarette do you begin having nic fits? For me, it's about an hour unless I'm doing something that has my full attention, like taking trips and making tips.
> 
> Sometimes it's as little as 20 minutes, like if I'm bored or on hold with the SBA.


? No idea where your going with this, was trying to figure out what to do with the rest of my loan


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## NauticalWheeler (Jun 15, 2019)

NicFit said:


> ? No idea where your going with this, was trying to figure out what to do with the rest of my loan


I was denied for the EIDL, and have pushed any hope of the advance from my mind


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## LoriO (Jan 9, 2019)

RobLinn said:


> If it's the EIDL Loan then here's a handy reference of what you can spend it on
> 
> https://pursuitlending.com/resource...rogram-over-view-and-application-information/
> You can use the funds to pay fixed debts, payroll, accounts payable and other bills that you would have typically been able to pay had your business not been impacted by COVID-19. The funds from these loans cannot be used to replace lost sales, refinance long-term debt or to expand.
> ...


Hey Robin, Did you just open up another account to put the money in? Does it have to be an actual business account or can I just open up an account like I have for rideshare?


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## LoriO (Jan 9, 2019)

Atom guy said:


> I am 100% self employed between ride share and being a landlord. So my EIDL money is going towards my mortgage payments and car payments. That's it. I've got the money in a separate checking account to make the accounting easy


Do you have a business checking or regular one?



NicFit said:


> What about paying myself a bonus for dealing with this Covid crap?
> 
> So I can use the money for the car payments but I can't pay into the rest of the car loan? That doesn't make sense, same bill, just paying furlture payments of it


I was told you could pay off the car loan because it's existing debt.


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## Atom guy (Jul 27, 2016)

LoriO said:


> Do you have a business checking or regular one?
> 
> 
> I was told you could pay off the car loan because it's existing debt.


I normally run everything through my regular checking. But for the EIDL money I opened a separate account just to keep the record keeping easy.


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## NicFit (Jan 18, 2020)

LoriO said:


> Do you have a business checking or regular one?
> 
> 
> I was told you could pay off the car loan because it's existing debt.


I'm going to, it's part of the business and it's expense, if they audit me and say I wasn't suppose to use it for that what are they really going to do?


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## LoriO (Jan 9, 2019)

Atom guy said:


> I normally run everything through my regular checking. But for the EIDL money I opened a separate account just to keep the record keeping easy.


Thanks. I am doing that too but will open a new account once the money is deposited and transfer it there.


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## LoriO (Jan 9, 2019)

RobLinn said:


> If it's the EIDL Loan then here's a handy reference of what you can spend it on
> 
> https://pursuitlending.com/resource...rogram-over-view-and-application-information/
> You can use the funds to pay fixed debts, payroll, accounts payable and other bills that you would have typically been able to pay had your business not been impacted by COVID-19. The funds from these loans cannot be used to replace lost sales, refinance long-term debt or to expand.
> ...


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