Biden’s COVID plan means changes to EIDL small-business loan program
As part of stepped up measures by the Biden administration to combat the effects of the COVID-19 pandemic, the U.S. Small Business Administration has announced major enhancements to the COVID Economic Injury Disaster Loan (EIDL) program. The program was introduced during the Trump administration to support small-business communities hurt by the economic effects of the pandemic — especially hard-hit sectors such as restaurants, gyms and hotels.
The SBA announced it is ready to receive new applications immediately from small businesses looking to take advantage of the new policy changes.
“The SBA is working hard to improve the COVID EIDL experience for our small-business owners. Changes have been implemented which have increased our daily processing of loans from 2,000 applications to more than 37,000 applications a day,” said Marla Trollan, SBA Utah District director. “As the pandemic continues we know that our businesses are still in need of support. We hope that increasing the EIDL loan cap to $2 million will help these businesses keep their operations going and their staff employed as we continue to work together to recover our economy.”
Key changes to the EIDL program announced by the SBA include an increase of the EIDL loan cap from $500,000 to $2 million. Loan funds can be used for any normal operating expenses and working capital, including payroll, purchasing equipment and paying debt. The COVID EIDL funds will also now be eligible to prepay commercial debt and make payments on federal business debt.
Also changed is repayment deferment period for loans. Small-business owners will not have to begin COVID EIDL repayment until two years after loan origination.
Information and loan application procedures for the EIDL program are online at https://www.sba.gov/funding-programs/loans/covid-19-relief-options/eidl.