CORRECTION: A previous version of this report indicated the SBA Advance program was re-opened but that is no longer available, according to the SBA.
The Small Business Administration (SBA) has announced it has extended the Economic Injury Disaster Loan (EIDL) program portal to eligible businesses affected by the COVID-19 pandemic. Businesses can receive long-term, low-interest loans. This will help them recover from the disruptions that took place in their businesses. They can use the loan for paying rent, mortgage, vehicle leases, payroll, and other bills.
The second round of COVID-19 EIDL assistance also comes with improvements to the application and loan closing process. This includes deploying new technology and automated tools. The SBA has approved $197 billion through the EIDL for working capital funds to small businesses.
EIDL Loans Open to More Businesses
- With the EIDL businesses can borrow up to $2 million to provide working capital for expenses such as fixed debt and payroll costs. Eligible applicants can also get up to $10,000 ($1,000 per employee) in funds of emergency economic relief to businesses that are currently experiencing temporary hardships.
- The loans have an interest rate of 3.75% for small businesses. And to keep payments affordable they come with long repayment terms of up to a maximum of 30 years. This includes the deferment of the first payment for one year.
- With EIDL businesses can borrow up to $200,000 without a personal guarantee.
- First-year tax returns are not required, and approval can be based on credit score.
- Loans of $25,000 or less require no collateral. For loans above $25,000, you can use general security interest in business assets. Collateral can be machinery and equipment, furniture and fixtures, and others.
More Covid-19 Relief in the Future?
Since the declaration of the COVID-19 Pandemic, the SBA has approved over 3.6 million loans through the EIDL program in the first round. The deadline for the second round of EIDL runs until December 31, 2021. A further COVID-19 relief assistance amounting to $1.9 trillion is undergoing debate in Washington. This follows Congress’ previous passing of a $900 billion relief measure.