How to Pay Back an EIDL or PPP Loan

How to Pay Back an EIDL or PPP Loan

How to Pay Back an EIDL or PPP Loan

On December 22, 2020 Congress passed the new stimulus bill which includes new Paycheck Protection Program loans and new EIDL grants along with other small business relief. Read more about that legislation and apply for a new PPP loan here.

If your business received an Economic Injury Disaster Loan (EIDL) or Paycheck Protection Program (PPP) loan, you may have determined it isn’t a good fit for your small business for any number of reasons:

  • You just wanted the EIDL grant and not an EIDL loan, 
  • You didn’t understand the loan terms when you applied,
  • You can’t use the EIDL funds or PPP funds the way you hoped
  • You don’t think most of your PPP loan will be eligible for forgiveness,
  • You aren’t sure your business will survive to be able to repay a loan

Whatever the reason, you may want to pay it back. How do you do that? It can definitely be confusing! 

EIDL Loan Repayment

The website you can use to repay your EIDL loan can be found at Pay.gov

You must have your 10-digit loan number and a payment amount in order to pay it back. There is no prepayment penalty but it is possible a minimal amount of interest has accrued from the time the loan was disbursed. In addition, you’ll have to pay back the UCC filing fee of $100 if one applies to your loan. (UCC-1 filings apply to EIDL loans greater than $25,000.) 

Request a payoff amount before you submit your payment by contacting either: 

  • The Service Office listed on your monthly 1201 Borrower Statement OR 
  • The Disaster Customer Service Center at 1-800-659-2955 or if you have not yet received a 1201 Borrower Statement

You will be able to pay by 

  • Bank account (ACH)
  • PayPal account
  • Debit card

Here’s what the repayment form looks like: 

SBA Form 1201 loan repayment

Tip: Always make sure you are on the secure Pay.gov website when you make a payment! Look for the padlock in the URL bar of the page that you can click on to confirm you are on a secure site. 

Keep good records of any payments you make and when you made them; take screenshots if necessary.

Note that if you did get an EIDL loan for more than $25,000, it’s a good idea to check your business credit reports to make sure the SBA releases the UCC-1 filing. UCC filings can impact your ability to qualify for another small business loans.

If you just want to pay back some of the loan early but not all of it, you’ll use the same form.

EIDL Grant Repayment 

Remember that borrowers generally don’t have to repay an EIDL grant. These grants were given in increments of $1000 (up to $10,000) and should have been deposited into your bank account with the notation EIDG (with the “g” for “grant”). Until the IRS says otherwise, these funds may be taxable but it’s still free money for your business. 

However, if you did not fill out your application truthfully, did not apply in good faith, or you discovered your business really didn’t need the money, for example, you may want to return your grant as well. The SBA specifies that you should not use the information above to submit a payment for an EIDL Grant. Instead, contact the SBA at 1-800-659-2955 or DisasterCustomerService@sba.gov for  payment instructions.

PPP Loan Repayment

Paycheck Protection Program loans were made by lenders, not by the Small Business Administration. You must pay your loan back to your lender, not to the SBA. Contact your lender to ask for instructions for returning your PPP loan, 

This article was originally written on September 16, 2020 and updated on January 11, 2021.

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ABOUT AUTHOR

Gerri Detweiler

Education Director for Nav

Gerri Detweiler is Education Director for Nav. Known as a financing and credit expert, she has been interviewed in more than 4000 news stories, and answered over 10,000 credit questions online. Her articles have been widely syndicated on sites such as MSN, Forbes, and MarketWatch. She is the author or coauthor of five books, including Finance Your Own Business: Get on the Financing Fast Track. She has testified before Congress on consumer credit legislation.

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57 responses to “How to Pay Back an EIDL or PPP Loan

  1. Will sba send out monthly statements to make payments. They were sending me them Made first payment in June on my eidl loan. Have not yet received one yet for my July payment

  2. will sba send me monthly statement to repay my eidl loan. Made first payment in June so far no more statement from them.

  3. I asked about moving to an address outside of the low-income area after getting the EIDL advances since I have a home-based business, and whether I’d have to return the advances if I did. I called SBA today and they said since I was well within the time frame at my address in the low-income area when I originally applied last year, this wouldn’t be a problem. She said they are watching out for people moving businesses to low-income areas to get the advances.

  4. Hello, for a sole proprietor (LLC) that got both eidl advances (the targeted in May) and whose business address has and currently is in a low-income designated community, what happens if I move out of the low-income designated community in my city? My home-based business uses my apartment address as my business address (bookkeeping & administrative work) and I work outside the home providing services at customer locations, which are in both low income and non-low-income areas. Would I need to return the advances if I move to a non-low-income designated area? I am apartment hunting now and will probably be paying the same rent, whether or not it’s in a low income designated area. If I’m bound to my location, for how long? Also, while I have no plans to close my business, what happens to the eidl advances if I choose to close it? Thanks so much.

  5. Hello . How do I pay back my ppp loan to the lender when I can’t get in contact with my lender ? My lender is prestamos . Can someone please give me some type of instructions on how to pay back the rest of what I don’t use for my loan ??

      1. I’ve seen that question on this page and a number of others with this topic and the lenders vary. In researching, I’m seeing that a number of these so-called lenders were nothing more than newly created LLCs which is why so many people are saying they cannot get in touch with the lender. This was bound to be a mess.

  6. Hello,
    I’ve been trying to contact my lender through email to receive information on how to return ppp funds. I’ve had no luck. What is the next option when your lender won’t respond?

    1. I was prompted by Smartbiz that my 2nd PPP loan was able to be submitted I filled out application and it was submitted to Smartbiz for review on April 12 and i have emailed my loan officer and Smartbiz I have called and I have recieved no reply at All. What should I do this loan was my only hope of saving my business. And im due to have my baby on August 3rd

      1. We can only imagine how frustrating this is for you Tara. Lenders across the country are working around the clock to try to process as many of the thousands of applications that are still pending as they can before funding is exhausted. The SBAs recent shift to only allowing CDFIs and MBIs to submit applications (due to funding for others running out) added additional time to the process as they had to find lenders to handle pending applications.In the case of Smartbiz, my best advice is to access their chat during business hours and continue to check the status updates. I hope you’ll be able to get the funding your business needs.

        1. I received 8,332.00 PPP loan used some of it for my LLC as well as business cards. I listed myself as independent contractor and sole proprietor on my initial application and claimed myself as a employee so can I pay myself or do I need to get a n employee?

  7. Is the application filing only available during the weekdays? Starting my filing this Friday evening. It seems your site keeps buffering. I can’t move forward. Is there a number I can call and maybe speak to someone to fill out the application? I’m a single proprietor, or gig worker, and have withdrawn an application because they get stuck on the name-of-business. It seems I can’t move forward from there. Additionally, the chats aren’t live but preset, and therefore you can’t forward a good question (save this comment area, thank you). Seems I need help filing: Who can I speak to? Are there local institutions that I can sit down with to assist in filling it out?

  8. Hello, I would like to know how to contact my lender to return my PPP loan, I did not understand the term at the time and I’ve realized that I do not need it. So who can I contact to start the process of returning my PPP

    1. Kensal- as mentioned in the article you need to contact your lender. Look at the email or other information they provided in your loan documents for that contact information.

    2. Hi Kensal,
      I notice you experienced the same situation. Did you have any luck with returning funds to your lender?

      Thank you

  9. Hello how are you.
    I have applied for SBA disaster loan payments n I got approved for $66k n can I buy a house from this SBA disaster loan payments.?

    1. If you did not apply in 2020 you will not get an invitation to apply at the moment. You may still apply for an EIDL loan and they may open it up in the future to those who didn’t apply previously.

  10. I was a self employed most of 2019 and filed taxes for both 2019 and 2020 but with different jobs on 2020 can I apply for the ppp program and how do I know it will be forgotten if so?

    1. When you say different jobs I assume you mean different companies that paid you via 1099s? (Jobs typically withhold taxes while clients who pay via 1099 do not.) It doesn’t matter who your customers or clients were that paid you via 1099. If you report the income on Schedule C then you can choose which year to use for calculating PPP. This article about how to apply for PPP if you are self-employed should help.

  11. To: smartbiz and customers Bank I sent a request to both to cancel or extract the PPP loans from my checking account on or next to the same day it arrived in my account .will I be successful? It’s day three or 4now and neither has gotten back to me about it. Phone calls didn’t help.

  12. Hello , I borrowed a ppp loan I’m a sole proprietorship but business hasn’t been the best and I want to return the money but I spent some can I return the remaining balance and pay what I spent in payments? I don’t want no trouble or hassle I just want to return this and be done.

  13. I received an EIDL loan through the CARES Act. Can I apply for a PPP and if approved, use those funds to pay off the EIDL?

  14. I applied for the EIDL grant, was told they ran out of money. Then it got funded again but when calling about my original application, they told me they had no record of it.

    Then I applied for and received a PPP loan of 14k.

    A couple months went by and then all of the sudden I received notification that I have been approved for a $10k EIDL loan. Even though I’d already received the PPP loan at this point, I took the loan and stuck it in the bank. I am in the travel business and didn’t know what the future would hold so appreciated having the cushion. This loan is not forgivable and has to be paid back in full, with interest. I knew that when I took it.

    Now, I am finding out the amount of the EIDL loan is deducted from the forgivable amount of the PPP loan. I want to make sure I understand this correctly:

    10k of the original 14k PPP loan is not forgivable. Add that to the 10k EIDL loan and I am now paying back 20k, with interest. This essentially nets me 4k in interest free money never to be repaid but leaves me 20k in debt + interest.

    If I had not taken that EIDL loan, the entire 14k would be forgivable, netting me 14k in interest free money and no debt.

    I guess I don’t understand what the logic is behind this rule. Why are people who took EIDL loans being penalized when they are paying the entire EIDL loan back with interest. It makes no sense to me.

    Do I understand everything correctly? Also, do you know if I can just give the EIDL money back? I know there will be a little bit of interest at this point but if doing so will qualify me for the entire 14k being forgiven, it’s a no brainer. Just seems like a lot of necessary hoops for no logical reason.

    Thank you

    1. Steven – the EIDL loan is not subtracted from PPP. Previously EIDL grants were subtracted from PPP but they have changed that with the new stimulus bill (retroactively to anyone who already had PPP forgiven). Your PPP loan may still remain 100% forgivable if you spent it according to the guidance. And perhaps you qualify for a second PPP loan that will also be forgivable. We wrote about that here.

      You can give the EIDL money back if you would like. I wrote about that here.

      1. I got my loan through Kabbage and this is one of the questions on the forgiveness application:

        Did you apply and receive an EIDL Advance?
        The SBA requires that we ask if you have received an Economic Injury Disaster Loan (EIDL) advance. An EIDL is a loan advance offered by the SBA to businesses that are currently experiencing temporary difficulties. If you took an EIDL advance from the SBA, your maximum eligible amount of forgiveness will be reduced by the amount of your advance.

        Am I interpreting that incorrectly or has something changed that they have failed to update?

        1. Fortunately that was changed with the stimulus bill (Economic Aid Act). If you received an EIDL it will not be subtracted from PPP for forgiveness purposes. It’s retroactive as well. We wrote about that here.

  15. Dear Gerri,

    I am confused concerning the EIDL Advance. Conflicting information tells me that I have to repay, deducted from my PPP, and that is has been forgiven. We applied for the advance and received 10k, we also was awarded PPP funds. My total with my PPP and EIDL Advance was 36k. Our total payroll for period for the PPP qualification for forgiveness was 67k. The loan forgiveness application has not been processed through my bank yet and my banker seems disenchanted to find out any info. Any information would be helpful.

    Thank you in advance for your help.

    1. Mike – this is all part of the stimulus bill that passed December 27th 2020 and there is no official guidance from the SBA yet so likely your lender is waiting for additional info. But that legislation clearly states EIDL advance (not loan) is not deducted from PPP anymore (and retroactively for those who already got forgiveness.) In addition it is not taxable. This article should help: New EIDL $10,000 Grant: Do You Qualify?

  16. Dear Gerri,

    Great article as it is something I’m in the process of doing now. i took the EIDL as a safety net last summer, never spent it, and the loan term requests don’t fit with my 12-24 month plan. My only concern is the speed at which my repayments through pay.gov are processed and show up as proof of payment on my caweb.sba.gov loan page. Would you say 3-5 days? I want to make sure my small test payments arrive before sending the rest. Thanks

  17. Well, now the sba want us to pay back the so called “free money” from the eidl grant under the ppp loan repayment. SBA LIED!

    1. That’s my same thought….I never got an eidl loan only the grant. Now that I’m filling out the ppp forgiveness application the SBA IS MAKING THE BANK THAT SENT THE PPP MONEY bill me for the grant….
      Everytime I call the sba they tell me I have no loan and do not have to repay the grant but the bank was told differently by the sba….where are the legislation rules for this?

      1. It’s true that the grant does not have to be repaid but the grant must be deducted from PPP for forgiveness purposes. It’s in the CARES Act (Section 1110):
        6) UNEMPLOYMENT GRANT.—If an applicant that receives
        an advance under this subsection transfers into, or is approved
        for, the loan program under section 7(a) of the Small Business
        Act (15 U.S.C. 636(a)), the advance amount shall be reduced
        from the loan forgiveness amount for a loan for payroll costs
        made under such section 7(a).

        UPDATE: The stimulus bill passed 12/27/2020 eliminated the requirement that EIDL grants be deducted from PPP for forgiveness purposes.

      2. Hi Gerri. Hi there thanks for the article. I was hoping to find a answer on how can I pay off a Eild loan guess in my case it was a loan not a grant but loan. I was trying for a grant but ended up with loan which I am great full for don’t get me wrong. I have a small Cleaning company that was doing great until the big covid hit and then nothing well a couple jobs but not like it was. So I have been writing everyone I can to see what I can do for help paying it back. I was like most Americans were when it happened what am I going to do and yes this worked but now what. Get another loan to pay this off and then have to pay that off.

        1. Chad, if I understand you correctly you are having trouble paying your EIDL loan. Is that correct? I don’t have a simple answer for you unfortunately. The interest rate on EIDL loans is so low and the payment terms are so long–30 years–that I think you’d be hard pressed to find a loan with lower monthly payments. My best suggestion is that you connect with your local Small Business Development Center and/or SCORE. They offer free help to small business owners and they may be able to help you find new markets for your business or to tap into state or local grants or assistance for businesses affected by COVID-19. You can find your local office at SBA.gov/tools – click on local assistance. I hope I understood your question and I hope this is helpful.

          1. Hey there well I guess I was wrong I didn’t think I would get a answer already. I want to thank you for getting back to me , I will try to see what I can do about this loan. I want to wish you a happy holidays and tell you that you do a amazing job at what you do so thanks again
            Chad Desorcie

          2. Chad – I should add that payments are deferred on EIDL loans for the first year. So I think I must have misunderstood your question as payments shouldn’t be due yet. If you want to clarify feel free.

    2. This was part of the CARES Act as I referenced in the other comment to JD. I have heard that some legislators have talked about changing that. You may want to reach out to your elected officials in Washington.

      1. How long do i have to pay back PPP loan – I know there maybe interest. But mine was so small $8k because of the timing of my payroll last year (cash based) I didnt use it….help!

        1. It depends on when you took the loan BJ. As we explain in this article: The maximum loan term is five years for any loan originated on or after June 5, 2020, but nothing prohibits lenders and borrowers from mutually agreeing to a similar repayment period for PPP loans made prior to the date this legislation becomes law.