The Small Business Administration has significantly upped the cap for COVID-19 Emergency Injury Disaster Loans (COVID EIDL) from $500,000 to $2 million, providing low-interest, long-term loans for small businesses and nonprofits who experienced or continue to experience economic harm resulting from the pandemic.
The expiration of the SBA’s Paycheck Protection Program at the end of May and of the federal Employee Retention Credit at the end of 2021 leave this EIDL program as one of the best options for small businesses right now, offering 30 year, 3.75% fixed interest rates to businesses and 2.75% to private non-profits.
Per SBA’s Press Release, key changes include:
- Increasing the COVID EIDL Cap. 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.
- Implementation of a Deferred Payment Period. The SBA will ensure small business owners will not have to begin COVID EIDL repayment until two years after loan origination so that they can get through the pandemic without having to worry about making ends meet.
- Establishment of a 30-Day Exclusivity Window. To ensure smaller businesses have additional time to access these funds, the 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.
- Simplification of 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.
Visit www.sba.gov/eidl to learn more about eligibility and application requirements. The last day that applications may be received is December 31, 2021.
The Santa Clarita Valley Economic Development Corporation (SCVEDC) is a unique private / public partnership representing the united effort of regional industry and government leaders. The SCVEDC utilizes an integrated approach to attracting, retaining and expanding a diversity of businesses in the Santa Clarita Valley, especially those in key industry clusters, by offering competitive business services and other resources.