Now that the Small Business Administration has caught up with all of the requests for Economic Injury Disaster Loans (EIDL) and has started funding these loans, there are a lot of additional questions. \u201cAre there restrictions on how I use this loan?\u201d is the most common question we\u2019ve received in our office. Like all government programs, there are rules for the use of this loan. Much like the PPP loan program, we recommend that you open a separate bank account to disburse funds from this loan. Failure to follow the rules could cause your loan to become immediately due and payable. Unlike the PPP loan, the allowed expenditures are not specifically spelled out. The funds can be used as \u201cworking capital\u201d due to economic injury after January 31, 2019. The loans are not intended to replace sales and profits, but rather cover expenses that would have been paid by the business if the disaster hadn\u2019t occurred. Here are some examples of allowed and disallowed costs. You can: Pay rentPay lease\/debt payments (not credit cards)Pay vendorsPay tax obligationsPay ordinary and necessary financial obligations You cannot: Pay dividends or bonusesDisburse funds to owners (distributions)Repay shareholder loansExpand your operationsMake improvements to your business locationRefinance existing debtPay down government loansFund relocationFund lobbying activitiesPay penalties or finesDouble fund PPP loan expenses Additionally, the forgivable amount of your PPP loan may be impacted by your EIDL grant. While it\u2019s tempting to manage these loans yourself because times are tough and budgets are tight, getting it wrong could end up costing you more in the end. Please reach out to an up-to-date accountant for help managing these loans.