The patchwork system of relief programs smaller businesses are based on for weathering the COVID-19 pandemic has undergone several iterations now. Many of the changes have expanded the supply of funds to businesses excluded from earlier rounds of stimulus or made it feasible to allow them to combine programs. The guidelines governing who can get so what can be rather confusing. Small businesses are now able to obtain a second Paycheck Protection Program (PPP) loan, but can they get multiple EIDL loans?
Below, we’ll try to clear up some of the confusion around Economic Injury Disaster Loans (EIDL) and how they combine with other individuals. But first, let’s detail the development from the EIDL program which has recently been made.
The SBA Has Raised The borrowed funds Limit For that EIDL Program
The SBA recently announced the following growth of the EIDL program:
Starting a few days of April 6, 2022, the SBA is raising the borrowed funds limit for the COVID-19 EIDL program from 6-months of economic injury with a maximum loan amount of $150,000 to up to 24-months of monetary injury with a maximum amount borrowed of $500,000.
If you’ve received an EIDL loan susceptible to that old limits, you do not need to submit a request for an increase, as the SBA will reach out directly to you via email and provide additional information about how you can request a rise in the loan amount. Brand new loan applications and then any loans in-process once the new loan limits are implemented will be considered for loans covering Two years of monetary injury up to and including more $500,000.
You Can’t Apply For A Second EIDL Loan
Unfortunately, you can't obtain a second EIDL loan.
This is really a point of confusion for many small businesses because another program administered through the SBA, PPP loans, now allows certain qualifying businesses to use a second time.
EIDL loans, when they aren’t forgivable like PPP loans, have incredibly long term lengths as high as 30 years, with fixed rates of interest of three.75%. With payments deferred until 2022, these loans provide a large amount of flexibility and fill a rather different niche than PPP loans, that have more of a short-term scope. As the SBA now allows businesses to get both an EIDL loan and a PPP loan with no conflict, you still are only able to be accepted to have an EIDL loan once.
Additionally, many companies confuse EIDL loans with other SBA-run programs, for example Physical Damage Loans. These loans are made to mitigate losses that result from your home of economic being physically damaged by weather events, geological events, or riots. You should know that you can get both an EIDL loan and a Physical Damage Loan if both situations apply to you and your community continues to be declared a tragedy area.
You Might Be Able To Increase Your EIDL Size
It might seem counterintuitive, but while you can’t apply for an EIDL loan again, it can be done to get more money using your open EIDL loan case.
If you received less than $500,000 in COVID-19 EIDL funds, you are able to request a rise in your overall EIDL loan. You can request this increase either before or after you’ve accepted the loan. The SBA recommends when you’re in urgent necessity of funds, you accept the maximum amount currently being offered after which send a request for additional funding.
The additional amount that you can qualify for seems to be capped at six months of revenue for many cases. The amount is determined using a six-month period in 2022.
To request an increase, you’ll have to contact the SBA directly. The SBA recommends those interested send an e-mail to pdrecons@sba.gov using the word ‘INCREASE’ in the subject line. You’ll should also attach your newest federal tax return along with a signed IRS Form 4506-T. You can attach Form 3502 as well if you need to correct your financial situation.
Some Smaller businesses Could possibly get More Funding From The Targeted EIDL Grant Program
Toward the start of the pandemic, the SBA offered successful EIDL applicants as much as $10,000 of the help with grant form. These were called EIDL Advances. That program wasn't renewed if this ran out of money. However, a far more restrictive successor program known as the Targeted EIDL Advance has been around since December 2022’s Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act.
Targeted EIDL grants work similarly to the prior version however with smaller qualifications. To qualify, you have to:
- Have 300 employees or less
- Have experienced a 30% or greater loss of revenue between 2022 and 2022.
- Be located inside a low-income area.
Additionally, if you received the prior version of the grant, you may still get no more than $10,000 as a whole grants. So if you got $5,000 last year, the maximum you can get from the Targeted EIDL loan is $5,000.
Currently, you can’t apply for Targeted EIDL Advances. Instead, the SBA is sending invitations to companies that only received partial funding on their EIDL Advance from 2022 and businesses that previously applied and received nothing because of the program running out of money.
The Deadline To try to get EIDL Funding For COVID Relief Is December 31, 2022
If you haven’t yet applied for an EIDL loan, you still can. The official deadline for EIDL grant applications is December 31, 2022. You most likely shouldn’t wait, though, because these programs will have finite funding, and there’s no telling whether you will see additional rounds of funding in the future.
If you’re waiting on a Targeted EIDL Advance, you should know that first priority applicants started receiving invitations last month 1, 2022. Since the first 28-day period expires, second priority businesses ought to be receiving invitations. Once you’re received an invite, it requires around A 3 week period to process your case.
EIDL Loans For COVID Relief: FAQs
Can one get multiple EIDL loans?
No, you are able to only obtain a single EIDL loan. It may be possible to boost the amount you’re borrowing, however, so long as you took out under all the $500,000.
What is the maximum EIDL loan amount I'm able to get for COVID relief?
As of April 6, 2022, the maximum amount you can receive through an EIDL loan is $500,000.
Will the SBA exhaust EIDL funding?
Whether or otherwise the SBA has no EIDL funding depends on how popular this program remains and whether Congress keeps it funded. Most COVID-related programs were exhausted by the fall of 2022 before receiving additional funding in December, so I’d recommend against waiting.
How is the EIDL program not the same as PPP?
EIDL is a disaster-based long-term loan offered directly with the SBA; the PPP is a forgivable medium-term loan offered through the SBA’s lending partners and is made to cover specific expenses. Read about the improvement in our PPP VS EIDL breakdown.
More Funding Choices for COVID Relief
EIDL loans are just one part of the federal government’s economic response to the COVID-19 pandemic. If you’ve at their maximum your EIDL loan, or you don’t think it’s the best option for your company, you've other options. Check out our guides for information on other programs that may provide your small business with relief.
- SBA Shuttered Venue Operators (SVO) Grant Program: Guide To Eligibility Requirements & Application
- Round 2 PPP Loans Explained: Rules, Requirements, & Where you can Apply
- The Best Small company Loans For 2022: Top Picks For Every Type Of Business
