The U.S. Small Business Administration (SBA) this month made changes to the Economic Injury Disaster Loan Program (EIDL) as businesses continue to weather the economic impacts of the COVID-19 pandemic. All cooperatives are eligible for Economic Injury Disaster Loans.
According to SBA, the major changes include:
- Increasing the COVID EIDL Cap The SBA will lift the COVID EIDL cap from $500,000 to $2 million. Loan funds can be used for any normal operating expenses and working capital, including payroll, purchasing equipment, and paying debt.
- Implementation of a Deferred Payment Period The SBA will ensure small business owners will not have to begin COVID EIDL repayment until two years after loan origination so that they can get through the pandemic without having to worry about making ends meet
- Establishment of a 30-Day Exclusivity Window To ensure Main Street businesses have additional time to access these funds, the SBA will implement a 30-day exclusivity window of approving and disbursing funds for loans of $500,000 or less. Approval and disbursement of loans over $500,000 will begin after the 30-day period.
- Expansion of Eligible Use of Funds COVID EIDL funds will now be eligible to prepay commercial debt and make payments on federal business debt.
- Simplification of affiliation requirements To ease the COVID EIDL application process for small businesses, the SBA has established more simplified affiliation requirements to model those of the Restaurant Revitalization Fund.
EIDL is administered directly by the Small Business Administration. The deadline to submit an EIDL application is December 31, 2021.
More information on the program from SBA is available here.
You can also visit NCBA CLUSA’s COVID-19 information page here.