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SBA Reopens EIDL Program

The emergency loan and grant program had recently been available only to agricultural businesses.

The Small Business Administration (SBA) has reopened its Economic Injury Disaster Loan (EIDL) and EIDL Advance program to a broader array of small businesses affected by the coronavirus pandemic.

Disaster Loan

For the past month, the program had been available only to agricultural businesses, since demand was high and those types of businesses weren’t eligible initially.

“To meet the unprecedented need, the SBA has made numerous improvements to the application and loan closing process, including deploying new technology and automated tools,” Jovita Carranza, SBA administrator, said in a statement.

At one time, loans through the program could be for as much as $2 million, but the cap dropped to $150,000 due to high demand. EIDL’s emergency grant program also dropped from its initial amount of up to $10,000 per business to $1,000 per employee per business. According to data released earlier this month from the National Federation of Independent Business, 57% of those who applied for an EIDL have been approved, 38% haven’t heard about the status of their application and 5% were denied. About 36% of EIDL applicants received the loan as of June 2. Of those who requested an emergency grant, 69% had received the funds.

As of Sunday, June 14, 1.43 million loans had been approved for a total of $95.6 billion through the EIDL program.

The EIDL is a long-running SBA program, where small businesses affected by disasters can receive low-interest loans directly from the government. Typically, it’s been to provide assistance after natural disasters like hurricanes and tornadoes, but the government expanded it to cover economic pain caused by the coronavirus pandemic. The program is different from the popular $669 billion Paycheck Protection Program (PPP), which works through private banks. Though it got off to a rocky start, the PPP has approved 4.5 million forgivable loans for a total of $512 billion, as of last week. There’s still about $130 billion left in the program.

Businesses have until June 30 to apply for a PPP, but EIDL applications are open until the end of the year.