The Small Business Administration (SBA) has announced it has reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal to eligible businesses affected by the COVID-19 pandemic. Businesses can receive long-term, low-interest loans and emergency grants. This will help them recover from the disruptions that took place in their businesses. They can use the loan for paying rent, mortgage, vehicle leases, payroll, and other bills.
The second round of COVID-19 EIDL assistance also comes with improvements to the application and loan closing process. This includes deploying new technology and automated tools. The application process has been streamlined and the SBA says it should take you two hours and ten minutes or less to complete. Some $197 billion is available through the EIDL for working capital funds to small businesses.
- With the EIDL businesses can borrow up to $2 million to provide working capital for expenses such as fixed debt and payroll costs. Eligible applicants can also get up to $10,000 ($1,000 per employee) in funds of emergency economic relief to businesses that are currently experiencing temporary hardships.
- The loans have an interest rate of 3.75% for small businesses. And to keep payments affordable they come with long repayment terms of up to a maximum of 30 years. This includes the deferment of the first payment for one year.
- With EIDL businesses can borrow up to $200,000 without a personal guarantee.
- First-year tax returns are not required, and approval can be based on credit score.
- Loans of $25,000 or less require no collateral. For loans above $25,000, you can use general security interest in business assets. Collateral can be machinery and equipment, furniture and fixtures, and others.
More Covid-19 Relief in the Future?
Since the declaration of the COVID-19 Pandemic, the SBA has approved over 3.6 million loans through the EIDL program in the first round. The deadline for the second round of EIDL runs till December 31, 2021. A further COVID-19 relief assistance amounting to $1.9 trillion is undergoing debate in Washington. This follows Congress’ previous passing of a $900 billion relief measure.