COVID EIDL LOAN UPDATES
At Gettry Marcus CPA, P.C. we continue to stay apprised as to the status and availability of COVID-19 related grant and loan programs. Beginning October 8, 2021, the SBA will begin approving COVID Economic Injury Disaster Loans (“EIDL”) up to $2 million.
The following summarizes certain key facts with respect to the COVID EIDL program:
- COVID EIDLs are provided directly from the Small Business Administration (“SBA”), applicants must apply online through an SBA portal;
- This is a loan program, not a grant program;
- Interest rates are 3.75% for “for profit” businesses and 2.75% for non-profit businesses;
- Loan terms could be as long as 30 years;
- Payments are deferred for 24 months from loan origination but interest will accrue;
- The maximum loan amount has increased from $500K to $2 million, and the loan amount is based upon SBA criteria that determines the amount offered;
- If an applicant already received a COVID EIDL and qualifies for additional funds, do NOT apply for a new loan; apply for an increase through the SBA portal;
- Collateral is required for any loan greater than $25K;
- Personal guarantees are required for any loan greater than $200K;
- Loan funds can be used to pay payroll, rent/mortgage, utilities, pay or pre-pay business non-federal debt incurred (past, present or future debt), pay regularly scheduled federal debt, and to pay other ordinary business expenses;
- The last day applications will be approved is December 31, 2021.
There are additional provisions established by the SBA with respect to COVID EIDLs, including financial information that is required to be provided with the loan application. The Gettry Marcus team is here to assist with navigating the complexities of the COVID EIDL process. Please contact your account manager, or Gabe Shurek or Nicholas Backmann, the authors of this article.