As with so many things in life these days, change within the Small Business Administration’s Economic Injury Disaster Loan (EIDL) program seems to be inevitable. The EIDL application portal, on the Small Business Administration’s website, was overwhelmed with applications for loans and emergency advances within the first couple of weeks of operation. This resulted in a complete shutdown of the loan application portal on April 15. While a great deal of emphasis has been placed on the Paycheck Protection Program, the EIDL program has also been flooded by requests from needy business owners – and Congress funded this program with far less money.
According to the SBA, applications submitted between the evening of March 29 and April 15 are still being processed on a first-come, first-served basis. If you submitted your company’s information during that time, there is nothing else to do besides waiting to hear from the SBA that your application is being reviewed for possible approval.
Most recently, the SBA has made revisions to both the EIDL application process and some key features of these disaster loans. These revisions include:
- The only new applications accepted are those submitted by agricultural businesses that were not eligible for the EIDL in the first round of funding – new applications by any other type of business get automatically rejected. Agricultural businesses include those entities that are engaged in the production of food and fiber, ranching and raising of livestock, aquaculture, and all other farming and agricultural related industries (as defined by section 18(b) of the Small Business Act).
- With demand for the disaster loans far exceeding the supply of funds, a lower limit on the loan size has been imposed by the SBA. At the inception of this program, individual loans could be as high as $2 million. Without publicly announcing the change, the limit was reportedly drastically reduced to $150,000.
The latest information on EIDL loans that were approved indicates that the average loan size is approximately $130,000. So, while the limitation on loan size may not impact some borrowers, it certainly has a significant effect on those businesses with greater need for relief.
What changes are yet to come? Nobody really knows, but it is clearly important to be aware of further announcements that may impact your EIDL business loan. Be sure to reach out to your CRI advisor for up to date information on the available relief programs.