Last week, the Small Business Administration (SBA) announced major enhancements to the COVID Economic Injury Disaster Loan (EIDL) program, a federal disaster relief loan designed to support small businesses.
Changes to the program include:
- Increasing the COVID EIDL cap. The SBA will lift the COVID EIDL cap from $500,000 to $2 million. Loan funds can be used for any normal operating expenses and working capital, including payroll, purchasing equipment, and paying debt.
- Implementation of a deferred payment period. The SBA will ensure small business owners will not have to begin COVID EIDL repayment until two years after loan origination so that 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 additional time to access these funds, the SBA will implement a 30-day exclusivity window of approving and disbursing 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. COVID EIDL funds will now be eligible to prepay commercial debt and make payments on federal business debt.
- 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.
Eligible small businesses, nonprofits, and agricultural businesses in all U.S. states and territories can apply. Visit sba.gov/eidl to learn more about eligibility and application requirements.
The last day that applications may be received is Dec. 31, 2021. All eligible applicants should file their applications as soon as possible.