The U.S. Small Business Administration (SBA) announced major improvements to the COVID-19 Economic Disaster Lending (EIDL) program, a federal disaster relief loan designed to support small businesses still under the shock of the COVID-19 pandemic.
The SBA recently said it was ready to immediately receive new applications from small businesses looking to take advantage of these new policy changes.
“The SBA’s COVID Economic Disaster Loan Program provides a lifeline for millions of small businesses that are still affected by the pandemic,” said Isabella Casillas Guzman, administrator of the SBA. “We have revamped this essential program by increasing the borrowing limit to $ 2 million, providing a 24-month deferral and increasing flexibility to allow borrowers to repay higher interest commercial debts.
The SBA has also stepped up its outreach efforts to connect with smaller businesses as well as those in low-income communities who may also be eligible for COVID-19 EIDL Targeted Advance and Supplemental Advance grants totaling up to 15,000. $.
“Our mission-driven SBA team have 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.
The main changes announced by the SBA include:
- Increased COVID EIDL cap. The SBA will raise 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 purchase, and debt payment.
- Establishment of a Deferred Payment Period. The SBA will ensure that small business owners won’t have to start COVID EIDL repayment for two years after the loan is issued so they can weather 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.
- Expansion of eligible use of funds. EIDL COVID 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 established more streamlined membership requirements to model those of the Restaurant Revitalization Fund.
Improvements to the COVID EIDL program will allow more businesses more and more flexible support with the more than $ 150 billion in COVID EIDL funds available. What’s more, these changes should help entrepreneurs access capital at a time when, according to a recent Goldman Sachs survey of 10,000 small businesses, 44% of small business owners report having less than three months of cash reserves, and only 31% say they are confident in accessing finance.
For more information and to apply, go here. The last day for receipt of applications is December 31, 2021.
This article originally appeared on the website of our sister publication Security Sales & Integration.