SBA Administrator Guzman has announced major enhancements to the COVID Economic Injury Disaster Loan Program (EIDL) targeting hard-hit sectors such as restaurants, gyms and hotels. The program cap has been increased to $2 million, uses of funds have been expanded to include payment of past and future business debt and the program has introduced a streamlined review process. Payments are deferred for the first two years (during which interest will accrue), and payments of principal and interest at a rate of 3.75% are made over the remaining 28 years. There is no penalty for prepayment.
The SBA is now taking on-line applications for loans up to $500,000. On October 8, 2021, the SBA will begin approving loans greater than $500,000 up to the maximum of $2 million. Uses of proceeds include working capital to make regular payments for operating expenses, including payroll, rent/mortgage, utilities and other ordinary business expenses, and to pay business debt incurred at any time (past, present or future).
Loans over $200,000 require a personal guaranty. Real estate collateral (subordinate to prior recorded security interests) is required for loans over $25,000. The loan application is online at https://covid19relief.sba.gov/#/. Program information can be found at https://www.sba.gov/document/support-faq-regarding-covid-19-eidl. The last day that applications will be received is December 31, 2021. All applicants should file their applications as soon as possible.