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Ask HN: Have access to an EIDL loan, what should I do with it?

2 points by mike503 ↗ HN
I finally got [pre?]approved for the EIDL program - I originally applied nearly 2 months ago, more interested in the "free" grant portion of it, which was immediately exhausted and I haven't seen a peep about it since.

Anyway, I am approved for $18k at 3.5% for 30 years ($88/month payment) with first payment due after the first 12 months (it looks like the first year nothing is due.)

I'm curious what ideas people would have for how I could use this? I am just a freelancer with a day job, so I don't need a loan to survive, but if there was something worthwhile that I should be looking into, I am all ears. Using it to bootstrap a new business, or purchase an existing business/idea, etc?

3 comments

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codingdave
Honestly, why take the loan if you don't need it and don't know what to do with it. Even at 3.5%, you'd pay an extra $11,000 over the course of the loan. (Less if you pay it off early.)

But unless you have a compelling reason to take on debt... why would you?

mike503
Getting a chunk of seed money up front for something (similar to any loan) except this one has better terms than most options, and I happen to be approved already.

I (like many people) did this for the EIDL "free" grant money mainly, however, that hasn't happened and who knows if it's going to anyway. :p

mike503
also, ideally the rate of return on whatever venture or investment would be higher than that interest rate, so even if the loan was not paid off immediately, it would still be profitable. it's just an extra chunk of money being offered but needs to be in a justifiable "business" sense.