The deferment period has also been pushed back for current and future EIDL loans to 24 months from the loan origination date.Ĭontact us today to review programs available to assist business owners experiencing pandemic-related financial difficulties. The SBA also provided a timeline of 6 weeks to process loan increase requests therefore, businesses should act quickly to take advantage of the 3.75% interest rate over a 30-year term. The program will end on December 31, 2021, or when funds are exhausted. Decisions on loans over $500,000 will occur on October 8, 2021, at the earliest. The increase can be requested via the COVID EIDL portal if you already have a loan, while a business applying for the first time should complete the online COVID EIDL application. Additionally, regular payments may be made on federal debt. The funds can now be expended to pay and prepay commercial debt incurred in the past, present, or future. More flexibility has also been granted in the allowable use of funds. The SBA will calculate the maximum loan amount by taking 2019 gross sales less 2019 cost of goods sold and multiplying by 2, or $500,000, whichever is less. The loan cap has been increased from $500,000 to $2,000,000. Contact us.The SBA announced several policy changes to the COVID-19 Economic Injury Disaster Loan (EIDL) program effective September 8, 2021. Wondering if you can benefit? We can help you navigate the loan request process. Business owners should also find out what other loan terms their existing banking relationship can provide before going forward with an EIDL loan or requesting an increase as they may be able to provide more flexible terms and conditions. Proceeds from EIDLs are restricted to working capital purposes and have restrictive covenants that the business must follow to be in compliance with the loan agreement. Businesses that applied in 2020 have a 24 month deferment and new businesses that apply in 2021 will have an 18 month deferment period.īefore applying for an EIDL loan increase or an EIDL loan in general, business owners should consider whether the loan makes sense for their business. The first payment date for all loans is pushed to 2022. The deferment period has increased as well. Yes, businesses that did not take a loan yet are also eligible for the $500,000. It may be several weeks before you receive a response due to the high volume of requests expected.Īre businesses that did not take out a loan eligible for the increased loan amount? The SBA will process increase requests in the order they are received. How soon will you hear back from the SBA? The invitation email will be sent to the original email address that you used during the original application process. The SBA will automatically review your prior application and email you instructions on how to request an increase to your existing EIDL if you qualify. For any loans of $500,000 or less, real estate collateral will not be required. Also, the SBA will require an unsecured personal guarantee for loans over $200,000 from any individual with 20% or more ownership. Note that for loans over $25,000, the SBA will continue taking a security interest in business assets. A recent policy change increases loan limits up to 24 months of economic injury, with loan amounts up to $500,000. The program previously limited the coverage to six months of economic injury, to not exceed $150,000. The Economic Injury Disaster Loan program provides low interest loans to small businesses (those with 500 employees or less) and nonprofit organizations to help offset revenue loss due to COVID-19. Here’s what you need to know about the new loan limits. Did you receive an economic injury disaster loan (EIDL) from the Small Business Administration (SBA)? While these loans were previously limited to $150,000, the SBA recently announced the limit has been increased to $500,000.
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