CORRECTION: A previous version of this report indicated that the SBA Advance program had been reopened but is no longer available, according to the SBA.
The Small Business Administration (SBA) announced that it has extended the Economic Disaster Lending Program (EIDL) portal to eligible businesses affected by the COVID-19 pandemic. Businesses can avail of long term loans at low interest rates. This will help them recover from the disruptions that have taken place in their businesses. They can use the loan to pay rent, mortgage, car rentals, payroll, and other bills.
The second round of EIDL COVID-19 assistance also comes with improvements to the loan application and closure process. This includes the deployment of new technologies and automated tools. ASB approved 197 billion dollars through EIDL for small business working capital.
EIDL loans open to more businesses
- With EIDL, companies can borrow up to $ 2 million to provide working capital for expenses such as fixed debt and labor costs. Eligible applicants can also obtain up to $ 10,000 ($ 1,000 per employee) in emergency economic assistance funds for businesses currently in temporary difficulty.
- 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 30 years. This includes the deferral of the first installment for one year.
- With EIDL, businesses can borrow up to $ 200,000 without personal collateral.
- First year tax returns are not required and approval can be based on credit score.
- Loans of $ 25,000 or less do not require any collateral. For loans over $ 25,000, you can use the general security over the assets of the business. Guarantees can be machinery and equipment, furniture and accessories, etc.
More relief from Covid-19 in the future?
Since the COVID-19 pandemic was declared, the SBA has approved more than 3.6 million loans through the EIDL program in the first round. The deadline for the second round of EIDL runs until December 31, 2021. Another $ 1.9 trillion COVID-19 emergency aid is under debate in Washington. This follows the passage by Congress of a relief measure of 900 billion dollars.