What Do These Changes Mean for You?
The Small Business Association (SBA) made some changes to the Economic Injury Disaster Loan (EIDL), originally introduced under the FFCRA in March 2020. Under the original stipulations, businesses could apply for an EIDL Loan of up to $150,000 for six months.
As the COVID pandemic has lasted much longer than the original projected six months, the SBA and the federal government extended the deferment period for repayment from 6 months to 18 months. This deferment was in place through April 5, 2021, until the new provisions took effect.
Read on to learn about the changes and extensions made to the EIDL. Learn more about how the changes can help your business ride out this pandemic.
What Is the EIDL?
The EIDL is a small business loan that helps businesses pay operational costs throughout the pandemic. Many businesses needed to reduce their overall production and operations to accommodate COVID business laws or reduced demand. Many businesses, as a result, could not pay their overhead, including payroll, rent, utilities, and more. The EIDL was instituted to provide business owners with a low-interest loan to help them maintain their business operations and stay open during the pandemic.
Employers originally could receive up to $150,000 in six months to help with all expenses. The government deferred loan payments to help businesses get back on their feet. However, after six months, the pandemic was still going strong, and many businesses were still unable to open. Therefore, the SBA extended the deferment period to 18 months.
Under the EIDL, businesses could use some of the money to make payroll for employees. Much of this money could be forgiven, reducing their repayment obligations.
What Are the Newest Provisions to the EIDL?
As of April 6, 2021, the government and SBA increased the overall limit for borrowers of the EIDL from $150,000 in 6 months. The new limit for the EIDL is $500,000 in 24 months. Many businesses exhausted their relief and could not go back to business as normal. Many businesses are still operating on reduced staff, reduced production, and reduced incomes.
Yet, they are now being forced to decide if they should lay off employees, close, or try to keep their doors open. The new provisions allow these businesses to receive additional funding to help keep their business open for a bit longer. With the increased loan options, many businesses can keep their doors open without laying off employees.
How Can You Receive Additional Benefits from the SBA?
Anyone who has a pending loan application under the original loan amounts will automatically be considered for the new, increased loan amount. However, anyone who received EIDL funds can apply for the increased funding after the new funding goes into effect on April 6, 2021.
The SBA will send email instructions to the existing borrowers to apply for increased funding if needed.
What Do These Changes to the EIDL Mean for You?
If you are a business struggling through this pandemic, these changes to the EIDL give you a new lifeline to make it through and come out on the other side to remain open to the public. If you need additional EIDL funding, our team of experts can help you apply. Contact or Call Workplace HCM at 856.334.9711 to learn more about the additional available EIDL funding and how to receive the money you need to continue your operations.