COVID Economic Injury Disaster Loan Policy

As of September 8, 2021, new COVID EIDL policy changes have taken effect that entail the below updates to the program:

  • Maximum loan cap increased from $500,000 to $2 million
  • Use of funds was expanded to include payment and pre-payment of business non-federal debt incurred at any time (past or future) and payment of federal debt
  • Extend the deferment period to 24 months from origination for all loans (existing loans with a less than 24-month deferment will be adjusted)
  • Affiliation requirements simplified to an affiliate is a business that you control or in which you have 50% of more ownership
  • Developed additional path to meet program size standards for businesses assigned a NAICS code beginning with 61, 71, 72, 213, 3121, 315, 448, 451, 481, 485, 487, 511, 512, 515, 532, or 812
  • Exclusivity Period: From September 8, 2021 to October 8, 2021, the above policy changes will be applicable to applications for <$500K while applications for >$500K will not be approved and therefore receive the policy changes until October 8, 2021
  • See more details on the COVID-19 September 8, 2021 Policy Changes.

General Terms for the EIDL (Economic Injury Disaster Loan)

Product

Loan directly from SBA that must be repaid. Low-interest, fixed-rate, long-term loan to help overcome the effects of the pandemic by providing working capital to meet operating expenses

Collateral

Required for loans greater than $25,000

Personal Guaranty

Required for loans greater than $200,000

Uses of Proceeds

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)

Maximum Loan Amount

$2 million. Note: SBA will begin approving loans greater than $500,000 on October 8, 2021

Loan Term

30 years

Interest Rate

Businesses: 3.75% fixed

Private nonprofit organizations: 2.75% fixed

Payment Deferment

Payments are deferred for the first 2 years (during which interest will accrue), and payments of principal and interest are made over the remaining 28 years. No penalty for prepayment.

Fees

For loans $25,000 or less: No fees if applying directly through SBA

For loans greater than $25,000: One-time $100 fee for filing a lien on borrower’s business assets plus costs to file lien on real estate when applicable

For loans greater than $500,000 where SBA is taking real estate as collateral: One-time $100 fee for filing a lien on borrower’s business assets. Additionally, the borrower will be responsible for recording the real estate lien and paying the associated fees.

Are You Ready to Discuss the COVID Economic Injury Disaster Loan Policy for Your Business? Contact Us!

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5599 South University Dr., Suite 205
Davie, FL 33328

Virginia