On September 9, 2021, the Small Business Administration (“SBA”) announced several changes to its Economic Injury Disaster Loan (“EIDL”) Program.
The changes include:
- Increasing the COVID EIDL Cap to $2M. 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.
- Deferred Payment Period. Small business owners will not have to begin COVID EIDL repayment until two years after loan origination. The SBA stated that this change was designed to allow business owners to “get through the pandemic without having to worry about making ends meet.”
- 30-Day Exclusivity Window for Loans of $500,000 or Less. 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.
- Simplifying 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.
The SBA also announced that the processing of loans has increased from 2,000 applications to more than 37,000 applications daily, which has cleared the 600,000+ loan increase backlog, allowing new applications to be processed.