SBA Announces Major Changes to EIDL Program
The COVID-19 EIDL cap has been quadrupled from $500,000 to $2 million.
In addition to the normal uses for EIDL loans, funds are now also eligible to prepay commercial debt and make payments on federal business debt.
The SBA also released an interim final rule on September eighth that expands EIDL eligibility.
Access has been expanded from organizations with no more than 500 employees to businesses in the hardest-hit industries, such as education, retail, hospitality, and transportation among others, that have 500 or fewer employees per physical location, provided the business, together with its affiliates, has no more than 20 locations.
A 30-day exclusivity window focusing on the smallest business has been established.
The SBA says it will spend the next 30 days approving and disbursing funds for loans of $500,000 or less to protect main street businesses. Approval and disbursement of loans over $500,000 will begin after the 30-day period.
A deferred payment period has been implemented.
Small business owners will not have to begin COVID-19 EIDL repayments until two years after loan origination. This is an increase from the previous 18-month deferment period for loans made during 2021.
Affiliation requirements have been simplified.
The SBA has established new affiliation requirements that mimic those of the Restaurant Revitalization Fund to streamline the loan application process.
The EIDL is a 30-year loan with 3.75% interest. However, if you are a nonprofit, the interest rate is reduced to 2.75%. The deadline to apply is December 31st, 2021 but business owners should submit their applications as soon as possible, otherwise, they run the risk of funds running out like they did with the restaurant revitalization fund.