The U.S. Small Business Administration (SBA) on Friday released updated guidelines for applying for loans, advances and recourse under the COVID-19 Economic Disaster Lending (EIDL) program.
While the previously set December 31 deadline remains in place, the SBA said it strongly recommends that companies looking for an additional targeted advance submit their application by December 10. The agency cannot continue to process additional targeted advance requests after December 31. which means that applications received near this date may not complete the review process on time.
In contrast, EIDL and Targeted EIDL Advance requests received before December 31st will continue to be processed after that date until all funds are exhausted.
The SBA has said it will accept and consider reconsideration and appeal requests received on or before December 31, provided the review or appeal is received within six months from the denial date for them. reviews and 30 days from the date of denial of reconsideration for appeals – provided funding is still available.
The EIDL COVID-19 programs are designed to provide access to finance to small businesses economically affected during the COVID-19 pandemic. Funding comes in three forms, as following:
- COVID-19 EIDL loans have a 30-year term with fixed interest rates of 3.75% for small businesses, including sole proprietorships and independent contractors, and 2.75% for organizations with purpose. non-profit. The loan proceeds can be used for all normal operating expenses and working capital, including payroll, equipment purchase, and debt repayment. Loan payments are deferred for the first two years, although interest will accrue. The interest and principal payments will then be spread over the last 28 years of the loan.
- A targeted EIDL advance of up to $ 10,000 is available for businesses located in low-income communities, with 300 or fewer employees, and who have experienced a loss of income of more than 30% due to COVID-19.
- An additional targeted advance is available for recipients of the targeted EIDL advance who have 10 or fewer employees and have seen their income drop by at least 50% due to COVID-19. The advance limit is $ 5,000, which means that companies face a total limit of $ 15,000 if they receive both types of advance grants. None of the advance grants need to be repaid.
The guidance released by the SBA on Friday comes just over two months after the agency announced major changes to the EIDL program aimed at making money more accessible to more businesses. The most significant change was the raising of the EIDL loan limit from $ 500,000 to $ 2 million.
According to a report published Thursday, the ASB has approved:
- 3.84 million EIDL loans totaling nearly $ 300 billion;
- Over 465,000 targeted EIDL advances totaling just over $ 4 billion;
- And over 372,000 additional targeted advances totaling nearly $ 1.9 billion.
AICPA experts discuss the latest news on COVID-19 EIDL and other small business assistance programs at a virtual town hall held every two weeks. The webcasts, which offer CPE credits, are free for AICPA members and $ 39 for non-members. Go to AICPA Town Hall Series web page for more information and to register. City council recordings can be viewed free of charge on AICPA TV.
The AICPA Paycheck Protection Program Resource Page houses resources and tools produced by the AICPA to help cope with the economic impact of the coronavirus.
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– Jeff drew ([email protected]) is a JofA senior editor.