On April 24, 2020, the President signed a bill providing for expansion of the funding for various relief programs in the total amount of $484 billion. The legislation includes additional dollars for the heavily utilized Paycheck Protection Program, specific funding for hospitals and health care providers to cover coronavirus expenses and lost revenues, and adds $10 billion of funding for the SBA’s Economic Injury Disaster Loan program.
The initial $10 billion of EIDL funds that were a part of the CARES Act passed on March 27 was claimed by the nation’s businesses in just a few days. The additional funding will breathe new life into the program but is expected to be committed very quickly. Although the SBA’s online application process has been shut down since the CARES Act funding was exhausted on April 15, it is expected that the process will resume and be available for new applications very soon. As was true with the initial round of funding, the application is an entirely online process and can be found here: https://covid19relief.sba.gov/#/.
If you applied in the past and received an application number indicating that it was received by the SBA, you do not need to apply again. In fact, a duplicate application may actually slow the process of loan approval.
The guidelines for the EIDL are unchanged from the former rules – In summary, they provide for:
- The option to apply for an emergency advance is based on the number of employees at a rate of $1,000 per employee, up to a maximum of $10,000.
- A maximum loan amount of $2 million.
- A loan amount based on the SBA’s loan determination methodology utilizing financial data such as annual sales and cost of sales.
- Interest at a rate of 3.75% for small businesses and 2.75% for qualifying non-profit organizations.
- A collateral requirement for loans over $25,000.
- No personal guaranty for loans under $200,000.
With the new EIDL program funding in place, the time to apply for your business loan is just ahead. The application process is quick and relatively simple, but the loans will be handled on a first-come, first-served basis – so do not delay! For more information regarding further updates or additional help with the Economic Injury Disaster Loans program, contact your CRI advisor.