SBA reopens Covid relief loan programs for small businesses
The U.S. Small Business Administration has reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal to small businesses and independent contractors experiencing economic hardships due to the Covid-19 pandemic.
“The SBA is strongly committed to working around the clock, providing dedicated emergency assistance to the small businesses and non-profits that are facing economic disruption due to the Covid-19 impact," SBA Administrator Jovita Carranza said in statement June 15.
With the June 15 reopening of the EIDL assistance and EIDL Advance application portal to new applicants, Caranza said, additional small businesses and non-profits will be able to receive these long-term, low interest loans and emergency grants that would mitigate the economic impacts of Covid-119 on their operations.
“Since EIDL assistance due to the pandemic first became available to small businesses located in every state and territory, SBA has worked to provide the greatest amount of emergency economic relief possible. To meet the unprecedented need, the SBA has made numerous improvements to the application and loan closing process, including deploying new technology and automated tools.”
EIDL is a component of the Coronavirus Aid Relief and Security Act, also known as CARES Act. An initial amount of $10 billion was allocated to SBA for these grants, but due to the overwhelming number of applications, the SBA suspended accepting new applications in mid-April 2020 due to a lapse in appropriations for the grants.
SBA has lifted the suspension following the passage of another piece of legislation that allocated another $60 billion for EIDL and companion grants.
A total of 5,258 businesses in U.S. territories have received EIDL loans worth a total of $338.75 million from SBA as of June 5. These approved loans were part of the first wave of applications.
Guam had 491 approved loans worth $32.38 million; the CNMI had 81 ($4.84 million); American Samoa, 37 ($2.85 million); and Virgin Islands, 534 ($36.73 million). Puerto Rico had the largest number of loans received: 4,115 with a corresponding amount of $262.37 million).
SBA’s EIDL program offers long-term, low interest assistance for a small business or non-profit.
These loans can provide vital economic support to help alleviate temporary loss of revenue. EIDL assistance can be used to cover payroll and inventory, pay debt or fund other expenses.
Additionally, the EIDL Advance will provide up to $10,000 ($1,000 per employee) of emergency economic relief to businesses that are currently experiencing temporary difficulties, and these emergency grants do not have to be repaid.
SBA’s Covid-19 Economic Injury Disaster Loan (EIDL) and EIDL Advance
The SBA is offering low interest federal disaster loans for working capital to small businesses and non-profit organizations that are suffering substantial economic injury as a result of Covid-19 in all U.S. states, Washington D.C., and territories.
These loans may be used to pay debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact, and that are not already covered by a Paycheck Protection Program loan. The interest rate is 3.75 percent for small businesses. The interest rate for non-profits is 2.75 percent.
To keep payments affordable for small businesses, SBA offers loans with long repayment terms, up to a maximum of 30 years. Plus, the first payment is deferred for one year.
In addition, small businesses and non-profits may request, as part of their loan application, an EIDL Advance of up to $10,000. The EIDL Advance is designed to provide emergency economic relief to businesses that are currently experiencing a temporary loss of revenue. This advance will not have to be repaid, and small businesses may receive an advance even if they are not approved for a loan.
SBA’s EIDL and EIDL Advance are just one piece of the expanded focus of the federal government’s coordinated response.
The SBA is also assisting small businesses and non-profits with access to the federal forgivable loan program, the Paycheck Protection Program, which is currently accepting applications until June 30.