Economic Injury Disaster Loan
Below you can access information about federal, state, city and private resources in regards to coronavirus (COVID-19).
Economic Injury Disaster Loans
The U.S. Small Business Administration announced that it is increasing the maximum amount small businesses and non-profit organizations can borrow through the Economic Injury Disaster Loan (EIDL) program. As of September 8, 2021, the SBA raised the loan limit for the COVID-19 EIDL program to 24-months of economic injury with a maximum loan amount of $2 million (was $500,000 previously).
The September 8, 2021 policy changes also
expanded eligible use of funds to include payment and pre-payment of business non-federal debt incurred at any time (past or future) and payment of federal debt; and
extended the deferment period to 24 months from origination for all loans (existing loans with a less than 24-month deferment will be adjusted)
Loans have an interest rate of 3.75% for small businesses and 2.75% for non-profits, and a maximum term of 30 years. As referenced above, payments are deferred for the first two years (during which interest will accrue), and payments of principal and interest are made over the remaining 28 years. There is no penalty for prepayment. Collateral will continue to be required for loans over $25,000, and a personal guarantee is required for loans of more than $200,000.
The loans may be used to pay debts, payroll, inventory, accounts payable, and other ordinary and necessary expenses of the business that are not already covered by a Paycheck Protection Program loan. Business expansion/relocation, replacing lost profit or sales, refinancing long-term debt, or acquiring fixed assets are not eligible uses of proceeds. The SBA program update document also references that applicants must have a minimum of 570 credit score for loan applications of up to $500,000, and a minimum credit score of 625 for those greater than $500,000.
If the small business has already obtained a loan via COVID EIDL and would like to be considered for a loan increase, they should log onto their account on the SBA Portal (do not apply for another loan) to submit a loan modification. New applicants can get started by completing an intake form
Applications for new COVID EIDL loans or advances are no longer being accepted for this program.
Targeted EIDL Advance
The Targeted EIDL Advance program has reopened for businesses that have 300 or fewer employees that had previously applied to the SBA for EIDL assistance before December 27, 2020, are located in federally identified low-income communities, and can demonstrate a reduction in revenue of more than 30% during an 8-week period beginning on March 2, 2020 or later. Click here and read our blog post for more detail.
EIDL Advance grant distributions of $10,000 are available to eligible small businesses and nonprofits in low-income communities that did not previously secure these allocations, or the difference between what an entity received under the CARES Act and $10,000 if they received some prior EIDL advance funding on March 2, 2020 or later. As a reminder, recipients do not have to be approved for a loan to receive the Advance. Check out the Targeted EIDL Advance and Supplemental EIDL Advance FAQ or our blogpost for more information.
Effective immediately, the SBA has indicated applicants can email a request for reevaluation of a Targeted EIDL Advance application that was declined to TargetedAdvanceReevaluation@sba.gov. Be sure to use the subject line “Reevaluation Request for [insert your 10-digit application number],” and in the body of the email, include 1) identifying information for the application such as application number, business name, business address, business owner name(s) and phone number; and 2) an explanation and any documentation that addresses the reason for the decline.