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At Gettry Marcus CPA, P.C. we continue to stay apprised as to the lending programs available to business owners to help finance operations during the COVID-19 pandemic. On June 15, 2020, the SBA announced that the Economic Injury Disaster Loan program (“EIDL”) was once again accepting applications from potential borrowers.

The SBA has indicated that all U.S. states and territories are now eligible to participate in the EIDL program. Salient provisions of the EIDL program are as follows:

• Current borrowing limit is $150,000
• Fixed interest rates of 3.75% for small businesses, 2.75% for non-profit businesses
• Term lengths ranging from 10 to 30 years
• Deferral of loan payments for 12 months (interest accrues from loan origination)

Additionally, as with many other lending programs, in order to qualify for an EIDL, a borrower must be deemed eligible. The following are some, but not all, provisions an eligible borrower must adhere to:

• Have less than or equal to 500 employees
• Pass the Size Standards published by the SBA per industry
• Present economic need for the EIDL 
• Forecast an ability to repay the EIDL 

Potential borrowers must assess their economic need for an EIDL. The loan proceeds can be utilized to finance short and long term working capital needs. Potential borrowers should note that upon receipt of an EIDL, the borrower will face certain operational restrictions such as declaring and distributing dividends/bonuses, disbursing funds to owners, repaying shareholder loans, acquiring fixed assets, refinancing long term debt, etc. Business owners must consult with their internal and external financial teams to fully understand the current and future outlook of their respective business.  

If you would like additional information please contact your Gettry Marcus Advisor or Gabe Shurek, or Nicholas Backmann the authors of this article.