- The U.S. Small Business Administration’s COVID EIDL loan program will close to applications on Dec. 31
- The SBA warns that businesses should submit applications as soon as possible due to certain processing limitations
- Billions of dollars remain available in the COVID EIDL programs, but more than $30 billion was rescinded under the recently passed infrastructure bill
Summary by Dirk Langeveld
The U.S. Small Business Administration is urging small business owners interested in the COVID Economic Injury Disaster Loan programs to submit their applications as soon as possible, saying it may not be able to process applications received too close to the Dec. 31 deadline.
Under updated guidance for the program, the SBA said it will continue to accept applications for COVID EIDL loans and Targeted EIDL Advance grants until Dec. 31. These will continue to be processed after the deadline until funding is exhausted.
Applications will also be accepted for Supplemental Targeted Advance program until the end of the year, though the SBA warns that it cannot continue processing these applications beyond Dec. 31 due to legal requirements. The agency urged small businesses to apply for this funding by Dec. 10.
Through Dec. 31, the SBA will also accept and review reconsideration and appeal requests on applications to the COVID EIDL program as long as the request is received within the appropriate timelines – six months from the date of decline for reconsiderations and 30 days from the date of decline for appeals. Businesses can request changes to their maximum eligible loan amount for up to two years after the loan origination date or until funds are exhausted, whichever comes first.
The pool of available funding in the programs hasgotten shallower, as the recently passed Infrastructure Investment and Jobs Act rescinded $13.5 billion from the COVID EIDL loan program and $17.5 billion from the Targeted EIDL Advance program. Patrick Kelley, associate administrator for the SBA’s Office of Capital Access, said billions of dollars are still available to applicants.
“More than 3.8 million businesses employing more than 20 million people have found financial relief through SBA’s Economic Injury Disaster Loans,” said Kelley. “Key enhancements have been made to the loan program that will help our nation’s businesses recover and get back on track.”
The COVID EIDL program saw significant enhancements in September, including an increase in the loan cap from $500,000 to $2 million. The SBA also instituted a 30-day exclusivity window to approve and disburse loans of $500,000 or less, with the process for larger loans resuming on Oct. 8. Other key changes included a two-year deferral period for repayment, a simplification of affiliation requirements, and expanding eligible uses for the funds to include prepayments on commercial debt and payments on federal business debt.
COVID EIDL loans offer 30-year terms, with a 3.75 percent fixed rate for small businesses and a 2.75 percent rate for nonprofits. Targeted EIDL Advance grants of $10,000 are available to COVID EIDL applicants who are in low-income areas; can demonstrate at least 30 percent revenue loss during eight-week period any time after March 2, 2020; and have 300 or fewer employees.
Supplemental Targeted Advance grants of $5,000 are available to Targeted EIDL Advance recipients. These additional funds are focused on businesses in low-income areas that suffered a revenue loss of at least 50 percent during the COVID-19 pandemic and have 10 of fewer employees.
Businesses that qualify for Targeted EIDL Advance and Supplemental Targeted Advance funds are automatically notified after they have applied for a COVID EIDL loan. The SBA says businesses shouldn’t submit a duplicate COVID EIDL application if they do not receive a notification, but should instead follow instructions on the agency’s website to have their application reevaluated or updated.
As of Nov. 18, the SBA reported that 3.84 million COVID EIDL loans had been approved totaling $298.88 billion. These included 37,240 Connecticut businesses that had received $3.18 billion.
A total of 465,366 Targeted EIDL Advance grants totaling $4.04 billion and 372,487 Supplemental Targeted Advance grants totaling $1.86 billion were awarded as of Nov. 18. These included 3,915 Targeted EIDL Advance grants totaling $33.57 million and 3,011 Supplemental Targeted Advance grants totaling $15.1 million to Connecticut businesses.