September 14, 2021
Hot Topic Tuesday – SBA Releases Improvements to the EIDL Program
“The SBA’s COVID Economic Injury Disaster Loan program offers a lifeline to millions of small businesses who are still being impacted by the pandemic,” says SBA Administrator Isabella Guzman. Recently, the SBA made some enhancements to the EIDL program to get the necessary funding to small business in need. There is a reported $150 million remaining in the program.
Some of the recent changes include:
• The COVID EIDL cap increased from $500k to $2 million. The loans can be used for normal operating expenses and working capital. Working capital covers payroll, equipment purchases, and paying debts.
• Now small businesses who received an EIDL loan will not have to begin making payments until two years after the loan origination. The SBA wants to ensure these businesses can make it through the pandemic without the stress of repayment.
• The SBA is implementing a 30-day exclusivity window of approving and disbursing funds for loans that are $500k or less. After this 30-day period, they will begin approving loans over $500k.
• Eligible use of funds will include the repayment of commercial debt and making payments on federal business debt.
• The affiliation requirements will be simplified to help the application process. It will be modeled after the Restaurant Revitalization Fund.
In addition to these changes, the SBA invested in optimized processes and increased capacity. The revamped management team has enhanced the EIDL application and approval process, and they have increased their daily approval rate from 2,000 a day to 37,000 a day. Loan officers increased their efficiency and went from 1.86 applications per day to 15 applications per day.
The EIDL program can benefit small business owners that received loans previously through the Paycheck Protection Program, Restaurant Revitalization Fund, or Shuttered Venue Operators Grant.
“Our mission-driven SBA team has been working around the clock to make the loan review process as user-friendly as possible to ensure every entrepreneur who needs help can get the capital they need to reopen, recover and rebuild,” shares Isabella Guzman.
SBA Press Release