EIDL 2.0 is almost here. The Small Business Administration (SBA) is likely to raise the ceiling on its Covid Economic Injury Disaster Loans (EIDL) after Labor Day on September 6.
This would make a $2 million low-interest long-term loan available to any small businesses struggling in the middle of the pandemic.
Lets Get Into Detail about EIDL 2.0 Update
This COVID-19 EIDL loan was created to provide economic relief to small businesses and nonprofit organizations that are experiencing a temporary loss of revenue.
After the SBA approved only loans of up to $150,000 for several months, the ceiling was raised to $500,000 in March 2021.
The EIDL loan program, which has a 30-year maturity date, has traditionally had a $2 million ceiling and loan interest levels ranging from 2.75 percent for NGOs to 3.75 percent for corporations.
Not every business will be able to benefit from the EIDL 2.0 increase.
The amount you qualify for is based on your total income in 2019 less your cost of goods sold, less any EIDL you have already received.
Furthermore, it is unclear what the standards will be in terms of proving economic injury. To receive any type of additional EIDL, you may need to produce your 2020 figures and establish financial loss.
The intended release date for EIDL 2.0 was August 16, however, it was postponed due to unexplained causes.
By August 19, the SBA had authorized over 3.8 million EIDLs totaling $259 billion. Congress authorized $50 billion for EIDL to enable lending power of up to $367.1 billion.
That means that the $2 million EIDL loans would be available to about 54,000 businesses. INC reported.
Another intriguing aspect is that the SBA is anticipated to broaden the allowable costs that can be reimbursed using an EIDL.
Borrowers may be able to utilize the funds to repay any commercial debt, including credit card debt and government-backed debt.
Previously, utilizing the profits to pay off commercial debt was prohibited, as was refinancing.
EIDL $2 Million Loan Cap Increase: How to apply
The COVID EIDL cap has been raised from $500,000 to $2 million by the SBA. Loan money can be used for any typical operational expenditures and working capital, such as wages, equipment purchases, and debt repayment.
Loan Cap Increased to $2 Million, Expanded Use of Funds to Pay and Prepay Business Debt, Streamlined Review Processes, and Deferred Payments Introduced; First Approval and Disbursement of Loans of $500,000 or Less Introduced
How to Apply
Eligible small businesses, nonprofits, and agricultural businesses in all U.S. states and territories can apply. The SBA said.
Visit www.sba.gov/eidl to learn more about eligibility and application requirements.
The deadline for submission of applications is December 31, 2021. All applicants are encouraged to submit their applications as soon as feasible.
SBA has also invested in optimized processes and increased capacity to improve the customer service experience for applicants.
“The revamped management team implemented new processes and performance management such as prioritizing personnel for COVID EIDL and increasing the average number of loan application decisions made,” SBA said.
The Small Business Administration also said they have” accelerated daily processing of loan increases from close to 2,000 applications to more than 37,000 applications daily.”
“Loan officer productivity also went from 1.86 applications per day to 15 applications per day.” They added. “As a result of these increased loan review rates, the 600,000+ loan increase backlog has been cleared and new applications can be processed immediately. “
All business owners that have received previous loans through the SBA’s Paycheck Protection Program (PPP), Restaurant Revitalization Fund (RRF), or Shuttered Venue Operators Grant (SVOG) can still benefit from COVID EIDL.