SBA enhances COVID economic disaster loan program

The SBA has made the decision to provide additional assistance to small businesses facing difficulties due to the Delta variant.

WASHINGTON — The U.S. Small Business Administration (SBA) has announced major enhancements to the COVID Economic Injury Disaster Loan (EIDL) program, a federal disaster relief loan designed to support small business communities still in shock. of the COVID-19 pandemic.

The SBA said Thursday it was ready to immediately receive new applications from small businesses seeking to take advantage of these new policy changes.

“The SBA’s COVID Economic Disaster Loan Program provides a lifeline to millions of small businesses still impacted by the pandemic,” said SBA Administrator Isabella Casillas Guzman. “We have revamped this essential program – increasing the borrowing limit to $2 million, providing 24 months of deferral and expanding flexibility to allow borrowers to repay higher interest commercial debt.”

The SBA has also ramped up its outreach efforts to connect with smaller businesses as well as those in low-income communities who may also be eligible for the COVID EIDL Targeted Advance and Supplemental Advance supplemental grants totaling $15,000. $.

“Our mission-driven SBA team has worked tirelessly to make the loan review process as user-friendly as possible to ensure that every entrepreneur who needs help can get the capital they need to reopen, recover and rebuild,” adds Guzman.

Key changes announced by the SBA include:

  • Increase in the COVID EIDL ceiling. The SBA will lift the COVID EIDL cap from $500,000 to $2 million. Loan funds can be used for all normal operating expenses and working capital, including payroll, equipment purchases and debt repayment.
  • Implementation of a Deferred Payment Period. The SBA will guarantee that small business owners will not have to start repayment for COVID EIDL until two years after the loan is issued so they can get through the pandemic without having to worry about making ends meet.
  • Establishment of a 30-day exclusivity window. To ensure Main Street businesses have more time to access these funds, the SBA will 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 begin after the 30 day period.
  • Extension of eligible use of funds. COVID EIDL funds will now be eligible to prepay commercial debt and make payments on federal commercial debt.
  • Simplification of membership conditions. To make the COVID EIDL application process easier for small businesses, the SBA has established more streamlined membership requirements to model those of the Restaurant Revitalization Fund.

Improvements to the COVID EIDL program will allow more businesses to benefit from greater and more flexible support thanks to the more than $150 billion in COVID EIDL funds available. Moreover, these changes are meant to help entrepreneurs access capital at a time when, according to a recent Goldman Sachs 10,000 Small Businesses survey, 44% of small business owners say they have less than three months of cash reserves, and only 31% say they are confident in accessing finance.

For more information and to apply, go to here. The last day for receipt of applications is December 31, 2021.

Ryan H. Bowman