March 3


What Can You Spend SBA Disaster Loan On?

So, your business has been negatively affected by a natural disaster. The good news is that you may be eligible for a disaster loan from the Small Business Administration (SBA). But how can you use that money? Here’s a breakdown of how you can and can’t spend SBA disaster loan funds.


What Can You Spend SBA Disaster Loan On?


The EIDL program is the best way to start your small business because it’s one of the least restrictive funding programs. It means you can use it for any day-to-day expenses as long as they are permissible under this particular loan type. It includes things like web hosting, inventory needs, or office supplies. Anything related directly to an invoice would also qualify. If you were approved for a PPP and EIDL loan, the only specific expense is payroll. Once the fund’s end, any future fees that need to be covered must use another type of finance from other sources.

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What can’t I spend my EIDL on?


EIDL loans cannot be used for specific purposes, including buying capital assets, paying off old debts, and refinancing new debt. Also, it cannot be used to repay stockholder/principal loans or as a disbursement to owners. If you’re looking into obtaining this type of financing, make sure that it is the right fit by consulting your financial advisor first.


While this is the most flexible of all the programs, there are some restrictions to remember. When approved for your loan agreement, you are certified that EIDL funds would not be used for any previously approved purpose. It means you can’t use funds as collateral or borrow more money on top of your original offer.

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What’s the best practice for tracking the use of my EIDL funds?


You can keep your EIDL funds safe by putting them in a separate bank account. If the SBA has any questions, you need to provide some statements from before and after they were invested so that everything is clear.


The funds from your business account can be used for any eligible expense. Track all of the transactions you spend this money on and report them when SBA asks, although it’s not required.


How to Apply


When a disaster strikes, the first step you need to take is registering with FEMA. You can do this by calling their customer service line at 1-800 621 3362 or visiting

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You may get loans for flood damage if you follow these steps.

The first thing you need to do is get an application number from FEMA. After that, you should complete your SBA online to go through all necessary processes before being approved or denied. It includes providing contact information for applicants and social security numbers, registration details from previous hurricanes/storms, deed/lease documents, and insurance policies covering property contents. Make sure everything’s up to date! You’ll also need financial statements, including income levels over time plus account balances.




Getting an SBA disaster loan payment can help get you back on track. According to Lantern by SoFi, “You have funds that you can use to keep your business running, and you won’t have the added expense of paying them back.” Give them a call today.

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Author: Hannah



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