The Small Business Administration recently announced changes to its COVID-19 Economic Injury Disaster Loan program.
As part of President Joe Biden’s recently announced COVID-19 Action Plan, the SBA has improved the COVID Economic Injury Disaster Loan (EIDL) program to better meet the needs of small businesses, especially those hardest hit industries and smallest entities that still need relief.
The low-interest and long-term COVID EIDL program has helped millions of small business owners survive the impacts of the pandemic with its flexibility and affordability – allowing entrepreneurs to hire and retain employees and purchase needed equipment and inventory.
The new changes will make the program even more flexible to meet the needs of business owners. The changes include:
Qualified applicants can increase the amount of funding borrowed from $500,000 to $2 million.
- COVID EIDL funds can be used to pay and prepay commercial debt and make payments on federal business debt in recognition of the financial reality many small businesses are facing during this crisis.
- Further deferring payments for up to two years after the loan origination date.
- The creation of a one-month exclusive window for businesses requesting $500,000. During this time, approvals and disbursements will focus 100 percent on loans of $500,000 or less until Oct. 8, which time approvals and disbursements will be opened up to all loan sizes.
- More simplified affiliation requirements to model those of the Restaurant Revitalization Fund.
In addition to the EIDL changes, the SBA announced they will improve customer service response and the application user experience. They have increased COVID EIDL application processing capacity from an average of 2,000 to more than 37,000 applications per day.
They will accept applications for the COVID EIDL program until Dec. 31, or until funds run out. They encourage business owners not to delay and apply today.
All business owners who have received previous loans through the SBA’s Paycheck Protection Program (PPP), Restaurant Revitalization Fund (RRF) or Shuttered Venue Operators Grant (SVOG) can still benefit from COVID EIDL.
If you have questions about these changes, please contact your Zinner & Co. Recovery Team specialist.