Open Discussion Forum

Thoughts on the EIDL Loan Program

  • 1.  Thoughts on the EIDL Loan Program

    Posted 21 days ago
    I would like to get some other peoples thoughts on the EIDL Loan Program.  I am finding my self at a crossroads.  Our families childcare centers have been established in our area of Texas for that past 39 years as of this Month.  We have enjoyed a great reputation in the community and have actually grown significantly over the last 12 years to include adding 1 new center from the ground up and 5 after-school programs in our local school district.  We have also grown from 13 employees to 48 employees.  With that much overhead, it has always been an enrollment numbers game to keep things going.  However now I feel like my hands are tied.

    All 5 of our after-school programs have been closed since March 9th and will be closed through the end of the school year.  That's a total loss of 3 months of revenue from just those five locations.  May is when we normally get a boost in revenues from the "Re-Registrations" of the after-school program students for the next school year.  Those revenues always helped get us through the Summer when the enrollment at our two primary centers tends to dip even though we also have summer camps.  However, this May parents do not want to commit to another school year yet due to fears of losing their jobs and the possibilities that schools will not reopen in August.

    From March 9th to March 23rd we saw a steady decline in attendance and enrollment at both primary locations due to the public schools being closed and teachers deciding to keep their kids at home with them, other parents being told to work from home due to the "Stay at Home" orders, and then other parents deciding to keep their children at home due to fear of them getting the Covid Virus if they attended the daycares.  We eventually had to close because we couldn't make payroll, so we closed from March 26th to April 20th.  We got a PPP loan so that we could reopen and cover at least the next 8 weeks of payroll starting with the week of April 20th.  Now with the end of that 8 weeks approaching and our attendance and enrollment still being down, I have to decide if I should take out a non forgivable EIDL Loan.

    The terms of the EIDL sound good; low interest rate, 30 year payout, no payments for the first 6 months, etc.  However in order to avoid lay offs as well as to cover all of our expenses for at least the next 3-4 months I would need to take out at least a $500,000.00 EIDL loan.  Not that we would necessarily need to use all of the loan to get us through, but I honestly don't think the enrollment issues are going to improve until August or September and that is only if the public schools reopen.

    So I would like to know is anyone else considering taking out an EIDL loan to save their business and if so what have been some of your considerations in doing this?  Are there any potential pit falls with the EIDL loan program that other people have noticed?  I feel like I will need to make a decision about this sometime next week to have enough time to even get the loan processed.

    All comments are appreciated.

    ------------------------------
    Tim Kaminski
    Director/Owner
    Gingerbread Kids Academy
    Richmond TX
    ------------------------------