EIDL for recently acquired businesses

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September 27, 2021

by a searcher from Tufts University in Los Angeles, CA, USA

Does anyone have any experience with applying for EIDL funds for businesses that have been acquired during COVID?

I acquired three related businesses via asset sales in the last month, in each case setting up new entities to transfer over the assets and employees. The SBA clearly states that entities that were not in operation on 1/31/2020 are ineligible, but I've spoken to several CPAs and attorneys who believe that this may be a situation where the spirit of the law trumps the letter of the law. Since the businesses that I acquired were operating prior to 1/31/2020 and I made zero changes to operations (including assuming the long-term liabilities and retaining all the employees and vendors), I think the spirit of EIDL would indicate that we should be eligible.

Any stories of success (or failure) in this area would be much appreciated.

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Reply by a searcher
from University of Chicago in Chicago, IL, USA
We have been working on several EIDL loans with the SBA ...and what they accept and don't accept is really unclear - some go through easily that I wouldn't have expected, others they outright reject for no reason that i can fathom. FYI: we own several businesses. I would apply, be honest and see what happens. Very little downside.
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