On Sept. 9, 2021, the Small Business Administration (SBA) unveiled a new expansion of the COVID-19 Emergency Injury Disaster Loan (EIDL) program which includes increasing the loan limit and improving the range of uses, all while retaining the same low federal interest rate.
Many small businesses are facing challenges from the delta variant and still reeling from the pandemic, especially in hard-hit sectors such as restaurants, gyms and hotels. As a result, key changes have been announced:
- The COVID-19 EIDL program increased their loan cap amount to $2 million from $500,000. Consequently, eligible businesses that have already received funds through the COVID-19 EIDL program of a smaller amount can apply to increase their loan.
- The SBA implemented a 30-day exclusivity window for small businesses in which loans of $500,000 or less will be approved and disbursed, after which time approval and disbursements of loans greater than $500,000 will begin.
- COVID-19 EIDL proceeds can now be used to prepay commercial business debt and make payments towards federal business debt. This allows businesses carrying higher interest commercial debt or even credit card debt that was acquired over the last year to use COVID-19 EIDL funds to pay outstanding debt balances in one lump sum.
- The requirements for affiliated businesses for the EIDL program expansion will now mirror the Restaurant Revitalization Fund (RRF).
- Lastly, the SBA deferred EIDL repayment until two years after the origination of the loan to avoid further strain on small businesses.