October 5, 2021
The U.S. Small Business Administration (SBA) has quadrupled the loan cap for COVID-19 Economic Injury Disaster Loans (EIDL) from $500,000 to $2 million and added business debt payments to the ways in which the loan proceeds can be used.
Why the Change?
The SBA said the changes were implemented to make it easier for small business communities that are still impacted by the pandemic, including restaurants, gyms, and hotels, to access the $150 billion of funding that is still available for recovery assistance.
Do I Qualify?
In order to take advantage of the COVID-19 Economic Injury Disaster Loan, all applicants must be physically located within the U.S or designated territory and have realized working capital losses caused by the COVID-19 pandemic. To qualify, applicants must fall under the following categories:
For-profit businesses are also required to meet the minimum credit score of 570 to be eligible for loans of $500,000 or less; or must meet the minimum credit score of 625 to qualify for loans greater than $500,000. For more information regarding eligibility, you can visit the SBA’s EIDL FAQ or speak with a Perlson representative at 516-541-0022.
Running through December 31, the COVID-19 EIDL program offers 30-year loans with a fixed interest rate of 3.75% for small businesses, sole proprietors and independent contractors, and 2.75% for not-for-profits.
The recent changes expand eligibility from organizations with more than 500 employees to those with 500 or fewer per physical location, as long as the business with its affiliates have no more than 20 locations.
The SBA now allows entities that are majority-owned by a single corporate group to receive no more than $10 million combined.
If you have any questions pertaining to this or any other tax matter, we encourage you to reach out to a Perlson LLP professional. Please contact us at your convenience at 516-541-0022 to discuss how we can help you navigate your unique situation.
New York State has launched a program that aims at helping you secure the funding you need.