Date: April 28, 2022
Tips on Repaying Your EIDL Loan
Many small business owners took advantage of a great resource – the Economic Injury Disaster Loan (EIDL) offered by the Small Business Administration. It proved to be a saving grace for business owners that missed out on cash flow that they would have had but lost due to the effects of COVID. We helped our clients get access to over $3 Million in capital via the EIDL program and more than $1.8 million in forgivable loans through the Paycheck Protection Program. This enabled our clients to focus on running their businesses and helped to ease the pandemic-induced stressors. If you took advantage of this opportunity and have been wondering how to go about getting your EIDL loan paid back, or to see when your first payment is due, we have some tips for you.
There are two different systems that we recommend you create logins for:
1. The first is the Capital Access Financial System (CAFS). This system will show you your account balance and when your payment is due. You can’t make a payment through this platform however; it is mainly for balance and due date. After you create an account in the CAFS system, on the top left side, select the Borrower and then borrower search to pull up your information – you can select the loan number hyperlink to view your due date, and term length, and minimum amount due.
2. Second is an account at the pay.gov site. This is where you will actually make your payment. You can mail a payment, but given the backlog that can (and does) happen with mail, your best bet is to make online payments. This will help ensure that your check doesn’t get lost in the mail. We recommend setting up recurring payments because this will ensure your payments are made on time, which is very important. To make an online recurring payment, you will need to go to Pay.gov and create an account (we will go through those steps next).
Setting up recurring payments will help you have one less worry on your mind – we know business owners have a lot to balance. We also recommend to our clients that they pay 150% above the minimum due as that will pay your interest down quicker and reduce the overall cost of the loan. After you have set up an account through pay.gov, see the steps below to set up autopay:
Tip- when you go to create an account, you have two options – Create a personal account (this is for sole proprietors) or Create a company account (use this if you received the EIDL though a business – LLC, Corp, etc).
1. Once you are logged in, you will want to go to the ‘Make a SBA 1201 Borrower Payment’ tab and select the “Pay it right here’ hyperlink.
2. This page will give you some details – scroll to the bottom and select “Continue to the Form”.
3. Next, you will fill out the SBA Form 1201 – you’ll enter the information requested (name, address, and your SBA loan number, which you can get from the CAFS system).
4. On the next page, make sure to select the Bank Account/ACH option, then hit next.
5. Now you can select ‘I want to set up recurring payments’. You will be prompted to enter your routing and account number (either business or personal checking – cards are not an option for recurring payments at this time).
6. Next, select the frequency (weekly, monthly, etc.), and the number of payments. For instance, if you do monthly, at a 30-year term, you will enter 360 in this box (12×30). You can get the due date for the CAFS system as well, we suggest making it about a week in advance to ensure timeliness.
7. Enter your payment date, and amount, then select Submit Payment, save the confirmation for your records, and pat yourself on the back – now you don’t have to worry about forgetting to make a payment on time!
We are passionate about financial literacy, and our goal is to help business owners understand their current financial view and help them make a plan to achieve their goals. Making healthy financial decisions, like putting your EIDL on Autopay, will help you make steps towards your goals. Do you want to retire at 50? Are you spending your money in a way that can help you with your long-term goals? These are just some of the many questions we can help you with. If you are interested in getting your financial roadmap started, we would love to help you. Click here to schedule a no-strings-attached assessment with one of our expert business coaches.