- SBA reopens Economic Injury Disaster Loan (EIDL) program after high demand
- Businesses able to get 30-year loans at 3.75% & cash advance to weather the COVID-19 storm
- Program had previously stopped accepting loan applications due to lack of funding
Monday, June 15th continues to look like it was the cash windfall event that many small businesses have longed for since the Coronavirus pandemic began in early March. In addition to rolling out the new Main Street Lending Program, the Small Business Administration (SBA) also resumed accepting applications for Economic Injury Disaster Loans (EIDL), providing yet another vehicle for small businesses to use to access liquidity as they begin to come back into operation. The SBA had previously had stopped issuing new loans due to a lack of funding. However, the coffers were replenished with an additional $10 billion in grant money and $50 billion in actual EIDL funding.
The EIDL program is attractive to potential recipients on two fronts: an advance of $10,000 regardless of loan approval as well as a long term loan at a low-interest rate. Applicants can request an advance of $1,000 for each employee up to $10,000. Additionally, the loans are offered at 3.75% over a 30 year period, representing a relatively cheap source of liquidity for businesses to pay for debts, payroll, accounts payable, and other bills that can’t be paid because of the disaster’s impact, and that are not already covered by the Paycheck Protection Program. As of last Thursday, the SBA had distributed 3.2 million advances, totaling $10.7 billion, as well as more than 1.3 million loans worth $90.9 billion in value.
As the financial relief continues to roll out from Uncle Sam, be sure to check out the DSJCPA COVID-19 Information Center to stay up to date and to arrange a time to speak to a member of our CRT.
Chief Business Officer, Disaster Relief Consultant
516-541-6549 | Email