SBA Enhances COVID Loan Program For Small Businesses
The SBA made major modifications to its original COVID Economic Injury Disaster Loan (EIDL) program, expanding the cap for federal disaster relief loans designed to better serve and support small business communities. The latest update to the EIDL program increased the cap for loans from $500,000 to $2 million, offering 24 months of deferment, and expanding flexibility to allow borrowers to pay down higher-interest business debt. Low-interest loans can now be paid back over 30 years. Funds from this program may be used for any operating expenses, including purchasing equipment and making payments on debt.
The key changes to the EIDL program include:
Deferred Payment Period: The SBA will ensure that small business owners will not have to begin COVID EIDL repayment until two years after loan origination.
30-Day Exclusivity Window: To ensure businesses have additional time to access these funds, the SBA will now implement a 30-day exclusivity window to approve and disburse funds for loans of $500,000 or less. Approval and disbursement of loans over $500,000 will go into effect starting October 8, 2021.
Expansion of Eligible Use of Funds: In addition to an increased cap of $2 million, COVID EIDL funds will now be eligible to prepay commercial debt and make payments on federal business debt. New eligible business expenses include payments on all forms of business debt, including loans owned by a federal agency, including SBA, or a small business investment company (SBIC) licensed under the Small Business Investment Act.
Simplification of affiliation requirements: To ease the COVID EIDL application process for small businesses, the SBA has established more simplified affiliation requirements to model those of the Restaurant Revitalization Fund.
These enhancements to the COVID EIDL program will now allow businesses greater flexibility in seeking support from the over $150 billion in available COVID EIDL funds. The SBA is ready to receive new applications immediately from small businesses looking to take advantage of these new policy changes. Now is the time for businesses to take advantage of SBA’s EIDL and other financial lending programs.
How to apply
Eligible small businesses, nonprofits, and agricultural businesses in all U.S. states and territories can apply. Please visit www.sba.gov/eidl to learn more about your eligibility and application requirements. The last day that applications may be received is December 31, 2021. All applicants should file their applications as soon as possible.
For additional information on COVID EIDL and other recovery programs please visit www.sba.gov/relief. Small business owners may also call SBA’s Customer Service Center at 1-800-659-2955 (1-800-877-8339 for the deaf and hard of hearing) or email DisasterCustomerService@sba.gov for additional assistance. Small business owners may also contact SBA’s Resource Partners by visiting www.sba.gov/local-assistance.