Do not take your EIDL fund out of the corporate account.

RE: Warning Against Misuse of Economic Injury Disaster Loans (EIDL)

I hope this letter finds you well. We are writing to bring to your attention the importance of adhering to the terms and conditions associated with the Economic Injury Disaster Loan (EIDL) that your business has received.

The EIDL program, administered by the Small Business Administration (SBA), is designed to provide financial assistance to businesses facing economic hardship resulting from a disaster. These funds are meant to be used for legitimate business purposes, such as covering operating expenses, paying bills, and managing financial obligations directly impacted by the disaster.

It has come to our attention that there may be concerns regarding the appropriate use of EIDL funds by some businesses. We want to remind you that any misuse of EIDL funds is a serious violation of the terms of the loan agreement and could lead to severe consequences, including legal action, repayment demands, and potential ineligibility for future assistance programs.

Penalties for EIDL Fraud: It is imperative to understand that EIDL fraud is a federal crime, and those found guilty of such misconduct may face significant legal consequences. The penalties for EIDL fraud can include:

• Fines: Those convicted of EIDL fraud may be subject to fines of up to $1 million per violation.
• Imprisonment: Those convicted of EIDL fraud may face imprisonment for up to 30 years.

To ensure compliance with the terms of your EIDL agreement, we strongly advise that you carefully review the approved uses of the funds and take immediate corrective action if there have been any unintentional deviations. If you are uncertain about the eligible uses of EIDL funds, we recommend consulting with a financial advisor or legal professional for guidance.

Failure to address any misuse of EIDL funds may result in the SBA taking appropriate actions to remedy the situation. We believe that, as a responsible business owner, you are committed to using these funds appropriately and in accordance with the guidelines provided.