EDITOR’S NOTES: This is some basic information about the new larger loans available, as of this October, to businesses due to COVID’s impact. If you find you seem to meet the standards, then you can read the entire list of facts AND click on the link to apply by going to the SMALL BUSINESS ADMINISTRATION’s web site
Basic facts on changes to COVID 19 Economic Injury Disaster (EIDL) loans
This federal small business loan program supports small businesses’ recovery from the COVID-19 disaster’s economic impacts by providing accessible and borrower-friendly capital.
Loan directly from SBA that must be repaid; low-interest, fixed-rate, long-term loan to help overcome the effects of the pandemic by providing working capital to meet operating expenses
Uses of Proceeds
Working capital to make regular payments for operating expenses, including payroll, rent/mortgage, utilities, and other ordinary business expenses, and to pay business debt incurred at any time (past, present, or future)
Maximum Loan Amount
$2 million. Note: SBA will begin approving loans greater than $500,000 on October 8, 2021.
Businesses: 3.75% fixed
Private nonprofit organizations: 2.75% fixed
As of September 8, 2021, new COVID EIDL policy changes have taken effect that entail the below updates to the program:
Maximum loan cap increased from $500,000 to $2 million
Use of funds was expanded to include payment and pre-payment of business non-federal debt incurred at any time (past or future) and payment of federal debt
Extend the deferment period to 24 months from origination for all loans (existing loans with a less than 24-month deferment will be adjusted)
Affiliation requirements simplified to an affiliate is a business that you control or in which you have 50% of more ownership
Developed additional path to meet program size standards for businesses assigned a NAICS code beginning with 61, 71, 72, 213, 3121, 315, 448, 451, 481, 485, 487, 511, 512, 515, 532, or 812
Exclusivity Period: From September 8, 2021, to October 8, 2021, the above policy changes will be applicable to applications for <$500K while applications for >$500K will not be approved and therefore receive the policy changes until October 8, 2021
See more details on the COVID-19 September 8, 2021 Policy Changes.
To obtain a loan via COVID EIDL, small business owners must meet the eligibility requirements outlined in Section 2 of the FAQS.
Additionally, below are the credit score requirements:
$500,000 or under: 570
greater than $500,000: 625
Small businesses must qualify for a certain loan amount by completing the economic injury formula which takes into account two years’ worth of revenue and cost of goods sold to produce an eligible loan amount. Review Section 2 of the FAQS and the Intake application form checklist for more details