EIDL LOAN

• This federal small business loan program supports small businesses’ recovery from the COVID-19 disaster’s economic impacts by providing accessible and borrower-friendly capital.

• FAQ for Loan Reconsideration

• Website for appeal process

• Website information for advance process

In response to COVID-19, small business owners, including agricultural businesses, and nonprofit organizations in all U.S. states, Washington D.C., and territories can apply for the COVID-19 Economic Injury Disaster Loan (EIDL).

Product:

Loan directly from SBA that must be repaid; low-interest, fixed-rate, long-term loan to help overcome the effects of the pandemic by providing working capital to meet operating expenses

Uses of Proceeds:

Working capital to make regular payments for operating expenses, including payroll, rent/mortgage, utilities, and other ordinary business expenses, and to pay business debt incurred at any time (past, present, or future)

Maximum Loan Amount:

$2 million. Note: SBA will begin approving loans greater than $500,000 on October 8, 2021.

Loan Term:

30 years

Interest Rate Businesses:

3.75% fixed

Private nonprofit organizations:

2.75% fixed

Payment Deferment:

Payments are deferred for the first 2 years (during which interest will accrue), and payments of principal and interest are made over the remaining 28 years. No penalty for prepayment.

Fees:

For loans $25,000 or less: No fees if applying directly through SBA

For loans greater than $25,000:

One-time $100 fee for filing a lien on borrower’s business assets plus costs to file lien on real estate when applicable

For loans greater than $500,000 where SBA is taking real estate as collateral:

One-time $100 fee for filing a lien on borrower’s business assets. Additionally, the borrower will be responsible for recording the real estate lien and paying the associated fees.

Collateral:

Required for loans greater than $25,000

Program updates:

As of September 8, 2021, new COVID EIDL policy changes have taken effect that entail the below updates to the program.

• Maximum loan cap increased from $500,000 to $2 million
• Use of funds was expanded to include payment and pre-payment of business non-federal debt incurred at any time (past or future) and payment of federal debt
• Extend the deferment period to 24 months from origination for all loans (existing loans with a less than 24-month deferment will be adjusted)
• Affiliation requirements simplified to an affiliate is a business that you control or in which you have 50% of more ownership
• Developed additional path to meet program size standards for businesses assigned a NAICS code beginning with 61, 71, 72, 213, 3121, 315, 448, 451, 481, 485, 487, 511, 512, 515, 532, or 812
• Exclusivity Period: From September 8, 2021, to October 8, 2021, the above policy changes will be applicable to applications for <$500K while applications for >$500K will not be approved and therefore receive the policy changes until October 8, 2021

Application process:

For any stage of application, please review the below supporting documents to navigate the application process.

New loan:

If the small business is a first-time COVID EIDL applicant, complete the following steps to apply:

• Confirm eligibility (review FAQs and below Loan Eligibility section).
• Complete Intake Form.
• Sign up to create a portal username via SBA email invite.
• Complete portal steps and submit relevant documents.
• Respond to SBA requests for signature, confirmation, and documents.
• The average SBA decision timeline for $500,000 or under is several weeks.

Increased loan:

If the small business has already obtained a loan via COVID EIDL before and does not already have an outstanding loan increase application in process, complete the following steps to apply for a loan increase:

• Confirm Eligibility (review FAQs and Loan Eligibility section).
• Complete Intake Form.
• Sign up to create a portal username via SBA email invite.
• Complete portal steps and submit relevant documents.
• Respond to SBA requests for signature, confirmation, and documents.
• The average SBA decision timeline for $500,000 or under is several weeks.

Loan greater than $500K to $2 million:

• For loans above $500K, you must include all additional documents for your application to be submitted (see list of required documents below).
• For loans greater than $500,000, applications will not be approved until after the exclusivity period ends on October 8, 2021, but applications can be submitted before then. Applicants can choose to apply for $500,000 or under immediately and then for over $500,000 funds after the exclusivity period ends, or they can choose to apply immediately for all desired funds above $500,000 and have their application wait for approval starting October 8, 2021.

The average SBA decision timeline for greater than $500,000 loans is one and a half months

Required documents:

• For loans of all sizes, federal income taxes, IRS Form 4506-T, and ODA Form P-022-Standard Resolution are required.
• For loans greater than $500,000, the following additional documents will be solicited.
  • SBA Form 2202 – Schedule of Liabilities
  • SBA Form 413 – Personal Financial Statement
  • List of Real Estate Owned (template on intake form)
• For all loans, additional verification documentation may be solicited by the SBA through the review process

Loan eligibility:

To obtain a loan via COVID EIDL, small business owners must meet the eligibility requirements outlined in Section 2 of the FAQS

Additionally, below are the credit score requirements:

• $500,000 or under: 570
• Greater than $500,000: 625

Small businesses must qualify for a certain loan amount by completing the economic injury formula which takes into account two years’ worth of revenue and cost of goods sold to produce an eligible loan amount. Review Section 2 of the FAQS and the Intake application form checklist for more details

IRS Tax Authorization Form 4506-T Applicants are required to submit a signed and dated Form 4506-T authorizing the IRS to release business tax transcripts for SBA to verify their revenue.

If you have previously submitted a Form 4506-T for an SBA loan or grant, you are still required to submit a new version for your COVID EIDL loan or loan increase.

Form 4506-T is only valid for 120 days. If the form in your file is nearing expiration, your loan officer may request a new one.

To avoid problems, please review these tips for preparing your IRS Tax Authorization Form 4506-T

Supplemental materials

FAQ Regarding COVID-19 EIDL

Cross-program eligibility on SBA COVID-19 relief options

FAQ Regarding Participation of Faith-Based Organizations in PPP and EIDL

FAQ Regarding Agricultural and Farm Loan Collateral Security and the SBA EIDL Program