Mark L. Brasee402.978.5306
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The EIDL direct loan program offers long-term, low-interest loans to small businesses, private non-profit organizations, and agricultural businesses that have suffered substantial economic injury as a result of a disaster. With regard to the COVID-19 declared disaster, the CARES Act authorized SBA to provide advances of up to $10,000 to applicants for use in general business purposes.
When an EIDL advance or loan is disbursed, the proceeds are deposited into the verified financial institution account belonging to the applicant or borrower. That is a depository institution account using the Employer Identification Number (EIN) or Social Security Number (SSN) entered by the applicant or borrower in the EIDL loan application.
SBA has indicated it is aware of suspicious activities associated with the EIDL program. It has listed the following as examples of suspicious activities:
SBA’s directs depository financial institutions to FinCEN’s COVID-19-related webpage (available at https://www.fincen.gov/coronavirus). Depository financial institutions suspecting suspicious activities should follow the protocols of the institution’s compliance department, and report the same to SBA’s Office of Inspector General.
SBA’s recent guidance is available here.
A printable version of this information can be found by clicking HERE.
This article has been prepared for general information purposes and (1) does not create or constitute an attorney-client relationship, (2) is not intended as a solicitation, (3) is not intended to convey or constitute legal advice, and (4) is not a substitute for obtaining legal advice from a qualified attorney. Always seek professional counsel prior to taking action.