Changes to Economic Injury Disaster Loan (EIDL) program
The SBA announced changes that the loan limit on the Economic Injury Disaster Loan (EIDL) program on September 9, 2021. Here are key modifications made to the program:
Loan Limit – Raised from $500,000 to $2,000,000
Use of Proceeds – Loan proceeds are now able to be used to pay or pre-pay business non-federal debt incurred at any time (past or future).
Deferred Payment Period – Payments on the EIDL loans will not begin until two years after loan origination. Interest will continue to accrue during this deferment period. The payments of principal and interest will be amortized over a 28-year schedule.
Application Window – Program application ends December 31, 2021.
Funds can’t be used to -
Expand your Business
Make prepayments on debt that is owned by a Federal Agency.
Start a New Business
The EIDL provides for a long-term fixed interest rate with the business rate at 3.75% and the Non-Profit Organization rate at 2.75%. These loans could potentially provide needed capital and debt re-structuring opportunities at a competitive interest rate. Additionally, the payment deferral period could help build needed working capital into your business.
Here is a link to the EIDL fact sheet:
https://www.sba.gov/sites/default/files/2021-09/COVID-EIDL-FAQs-090821-508.pdf
We suggest reaching out to your ELO trusted advisor and lender to see if the program may fit your business.