SBA Reopens the Economic Injury Disaster Advance Loan - They Are Available Again.
In response to the Coronavirus pandemic, Congress passed the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The Act allows businesses with less than 500 employees to apply for a Small Business Administration (“SBA”) Economic Injury Disaster Loan (“EIDL”) of up to $2 million. These loans include advance of up to $10,000 that does not have to be repaid.
In May, the SBA essentially shutdown the EIDL program, limiting the loans to “[a]gricultural businesses [which] includes those businesses engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries.” Yesterday, the SBA announced that it would be “reopening … the EIDL assistance and EIDL Advance application portal to all new applicants.”
Other than the advance grant of up to $10,000, EIDL loans are not eligible for the loan forgiveness provisions offered to the Paycheck Protection Program (“PPP”). It is also important to note that the advance grant will be rolled into any PPP loan in calculating the amount of the loan to be forgiven. The term of the EIDL is up to a 30-year term at 3.75% APR.
WFCA continues to review all available update on these loan and grant programs, as well as any other updates regarding their opportunities and obligations during the COVID-19 crisis.
Notice: The information contained in this update is abridged from legislation, court decisions, and administrative rulings, and should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.