The U.S. Small Business Administration (SBA) announced this week that it has reopened the portal for eligible applicants hurt by COVID-19 to apply for the Economic Injury Disaster Loan (EIDL) and the EIDL Advance program.
The SBA, in consultation with the U.S. Treasury Department, also posted what it described as a revised, borrower-friendly Paycheck Protection Program (PPP) loan forgiveness application and an EZ version.
The SBA said it has improved the EIDL application and loan closing process, including new technology and automated tools.
The EIDL loans of up to $2 million are available to small businesses, private nonprofit organizations, and small agricultural and aquacultural enterprises facing considerable economic hardship due to COVID-19.
EIDL assistance can be used to cover payroll and inventory, pay debt or fund other expenses that aren’t already covered by a PPP loan. The interest rate is 3.75% for small businesses and 2.75% for nonprofit organizations.
As part of their loan application, small businesses and nonprofits may request an EIDL Advance of up to $10,000 ($1,000 per employee). The EIDL Advance is designed to provide emergency economic relief to businesses that are experiencing a temporary loss of revenue. The emergency grants do not have to be repaid, and small businesses may receive an advance even if they are not approved for a loan.
Paycheck Protection Program
The Paycheck Protection Program is accepting applications until June 30, 2020. See the June 12 Alert story for a review of the changes signed into law at the beginning of this month.
The SBA’s EZ version of the PPP forgiveness application applies to borrowers that:
• Are self-employed and have no employees; or
• Did not reduce the salaries or wages of their employees by more than 25% and did not reduce the number or hours of their employees; or
• Experienced reductions in business activity as a result of health directives related to COVID-19 and did not reduce the salaries or wages of their employees by more than 25%.
The EZ application requires fewer calculations and less documentation for eligible borrowers, according to the SBA.
Both the EZ and the full forgiveness application give borrowers the option of using the original eight-week covered period (if their loan was made before June 5, 2020) or an extended 24-week covered period.
See the SBA’s PPP program web page for more information.