Does accepting EIDL loan affect PPP loan (forgivable portion) in any negative way?

Hello. I have small business that was negatively affected by covid and I did apply for EIDL during april and received some grant ($3000). I also applied PPP loan and got some money funded into my business acct. Now that they extended spending period for forgiveness from 8 wks to 24 wks, I'm looking forward to get the whole PPP amount forgiven.

In the mean time, I never paid much attention regarding EIDL, and I keep getting email asking me to proceed with EIDL that I applied prior to PPP loan. I am wondering, if I proceed with EIDL and accept EIDL loan, will that affect PPP loan negatively in any way? Like, will it reduce the forgivable portion of PPP loan (if so, I shouldn't accept EIDL unless I really need more money)? Or both PPP and EIDL have nothing to do with each other?

If i don't proceed with EIDL, will they take back grant money since they gave me grant money under the condition that I apply for EIDL? If I have to give up one of either EIDL grant money or PPP forgivable amount, I would rather give up EIDL and get PPP forgiven since PPP is a lot more than EIDL grant.

Eva2020-07-22T21:08:57Z

1) You don't have to give back the EIDL grant if you don't accept the EIDL loan.  2) The EIDL loan has no bearing on PPP forgiveness other than you can't use the same expenses for both.  3)  The EIDL grant DOES affect the PPP forgiveness. They subtract the amount of the grant from the amount of your PPP  eligible for forgiveness, effectively turning the grant amount into the 1% loan. If you manage to qualify for 100% forgiveness, you're going to have to pay back the $3000.  There is really good information on how all these things dovetail on NFIB.com.  Most banks haven't started taking forgiveness applications yet, so you still have time to figure this out.  You are past the dates to return either the grant or the PPP money to make it as though it never happened.  I would suggest that you not take the EIDL loan unless you're sure you're going to need it and can follow all the rules regarding how it can be used. That loan is going to hang around your neck for a long time. You also can only have one SBA loan out at a time, so if something happens later on you won't be able to get one.  You might want to wait to see what Congress has in store for the second stimulus package.

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