In September this year, the Small Business Administration (SBA) announced some key changes to its Economic Injury Disaster Loan (“EIDL”) Program. The disaster loan provided by the SBA is currently not limited to small businesses as non-profit organizations and enterprises involving the agricultural sector may also apply.
With the release of the EIDL updates, many small business owners are having a slightly difficult time in not only understanding the changes but also in discerning how their chances of applying or updating their EIDL have been affected.
In a nutshell, EIDL (or The Economic Injury Disaster Loan) is an SBA disaster loan program that serves small businesses affected by natural disasters in the U.S. If you’re wondering whether the COVID-19 pandemic is considered a natural disaster, then the answer is YES. EDIL can and does support recovery from the pandemic disaster. There’s a cap of up to $2 million in financial assistance from the SBA for which small businesses, independent contractors and sole proprietors can apply.
Payable for up to a period of 30 years, the EIDL can help your business meet the required financial burden that COVID-19 created for small business owners. The EIDL however does not cover your lost revenue or possible sales.
What EIDL does cover is a wide range of expenses for the use of its proceedings.
These also include:
Wondering whether you qualify for the COVID-EIDL?
Answer the questions below:
If your answers are “yes” to both, then you are eligible to apply for an EIDL.
There are quite a few other considerations, such as:
The bottom line is this. Being a federal program, all loans provided by the government will have a long list of sub-criteria to be met.
There are several changes in the original EIDL policy, which took effect in September 2021. We have consequently summarized these updates to make it as easy as possible for a normal business owner to understand the gist of the changes.
1. Loan Cap Limit Increased
2. Usage of Funds For Debt Repayment
3. Increase in Deferment Period for Repayment
4. Simplified Affiliation Requirements
5. Clarification on Eligibility for Newly Included Businesses
6. Cap Limit for Corporate Groups
This ensures there is no monopoly of SBA loan funds, and above all, businesses in the United States of America have an equal opportunity of acquiring the COVID-19 Economic Injury Disaster Loan.
At Monily, our integrated approach to aspiring startups and small/medium-sized businesses spans accounting, bookkeeping, payroll management, financial reporting, tax preparation, and more. We take care of the most time-consuming function of your business and hence, let you focus on what matters to you the most –– running and growing your business!
Our seasoned accounting and tax specialists are on hand to guide you through applying for an EIDL. We will also assist in avoiding the pitfalls and errors when applying and more importantly, actually qualify your business for receiving an EIDL. We understand that time is of the utmost importance and therefore, Monily will assist you every step of the way.