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SBA Accepting EIDL Applications from Small Businesses

On June 15, the Small Business Administration announced it was again accepting applications from small businesses for its Economic Injury Disaster Loan (EIDL) and EIDL Advance. The program was closed to new applications in mid-April due to a lack of funding, but the Paycheck Protection Program and Health Care Enhancement Act passed on April 24 appropriated an additional $60 billion to the program. In late April, the SBA began accepting applications again, but only from agricultural businesses, which had been excluded from eligibility in the initial round of funding.

The program provides loans of up to $2 million for recovery from economic injury resulting from COVID-19. The loans support working capital and may be used to pay fixed debts, payroll, accounts payable, and other bills that would otherwise have been paid if the COVID-19 crisis had not occurred. Loans are awarded on a first-come, first-served basis.

The loans come with an amortization period of up to 30 years. Loans to small businesses carry a 3.75 percent interest rate; for non-profit organizations, the rate is 2.75 percent. An emergency advance or grant of up to $10,000 will be provided to borrowers who request it. While the advance does not need to be repaid, it will reduce forgiveness on the borrower’s Paycheck Protection Program loan if the borrower is using both programs. Loans over $25,000 may require collateral, and loans over $200,000 may require personal guarantees.

To apply for an EIDL or learn more about eligibility criteria and program terms, visit sba.gov/disaster. To discuss relief options for your business, please contact your HBK Advisor.

About the Author(s)
Amy Reynallt is a Manager with the HBK Manufacturing Solutions Group in the Youngstown, Ohio office of HBK CPAs & Consultants. She is experienced in navigating the strategic and financial matters associated with manufacturing and works closely with manufacturers to help them plan, execute, and meet their short- and long-term financial goals.
Hill, Barth & King LLC has prepared this material for informational purposes only. Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding the matter.