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.