- The expansion of the Economic Injury Disaster Loan (EIDL) program creates a boon for small businesses.
- Find out how the expansion will affect you and your EIDL loan.
- Learn more about the extended deferment periods for all disaster loans.
As U.S. businesses continue to recover from COVID-19’s economic devastation, the U.S. Small Business Administration (SBA) is expanding loan opportunities. Beginning the week of April 6th, nonprofits and small businesses will be able to borrow up to $500,000 for up to 24 months. This expansion of the COVID-19 Economic Injury Disaster Loan (EIDL) program more than triples the existing limit of six months and a maximum loan amount of $150,000. This is big news, and Fiducial has more below!
What does this mean for you and your EIDL loan?
In a news release announcing the change, SBA Administrator Isabella Casillas Guzman said, “More than 3.7 million businesses employing more than 20 million people have found financial relief through SBA’s Economic Injury Disaster Loans, which provide low-interest emergency working capital to help save their businesses. However, the pandemic has lasted longer than expected, and they need larger loans.”
Businesses that had already applied for a COVID-19 EIDL loan need not worry about reapplying. All applications in process will automatically be considered for the increased amounts. Also, instructions will be published to allow those who have already been approved to apply for the expanded amounts. A loan increase can be requested via SBA.gov. In addition, an email will go out to all previously approved borrowers containing the same information.
The COVID-19 EIDL program has been extremely successful, with over $200 billion in loans already approved by the SBA. Small businesses, including independent contractors and sole proprietors, have been provided 30-year maturity loans at a 3.75% interest rate. Not-for-profits, however, will pay only 2.75% in interest.
Extended deferment
But wait! We have more good news for borrowers! On March 12th the SBA announced that borrowers for all disaster loans, including the COVID-19 EIDL loans, will receive extended deferment periods. Interest will still accrue on all outstanding loan balances, so although payments are not required until 2022, borrowers do have an incentive to begin paying their balance off sooner.
Have questions about the EIDL loan limit expansion and how it could affect your business? Ready to discuss your options? Call Fiducial at 1-866-FIDUCIAL or make an appointment at one of our office locations to discuss your situation.
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For more small business COVID-19 resources, visit Fiducial’s Coronavirus Update Center to find information on SBA loans, tax updates, the Paycheck Protection Program, paid sick and family leave, and more.