On Sept. 9, 2021, Administrator Isabella Casillas Guzman of the U.S. Small Business Administration (SBA) announced the following significant enhancements to the COVID-19 Economic Injury Disaster Loan (EIDL) program.

  • Increase of the COVID-19 EIDL cap from $500,000 to $2 million. Loan funds can be used for any normal business operating expense and working capital. Some of these expenses include payroll, purchasing equipment, and paying debt.
  • Implementation of an extended deferment period was provided. Previously, repayment of a COVID-19 EIDL did not need to be paid until one year later; now the time period is two years after loan origination.
  • A 30-day exclusivity window was created for main street businesses to have additional time to access COVID-19 EIDL funds. Approval and disbursement of loans over $500,000 will begin after the 30-day period ends on Oct. 8, 2021.
  • Prepayment of commercial debt and the ability to make payments on federal business debt are now eligible uses under the COVID-19 EIDL program.
  • Additionally, the SBA simplified the affiliation requirements for COVID-19 EIDL loans, which are now more similar to the affiliation requirements under the expired Restaurant Revitalization Fund. An affiliated business is one that the borrower controls or has a 50% ownership in.
  • There is now an additional way for companies to meet program size standards. Businesses that have a NAICS code beginning with 61, 71, 72, 213, 3121, 315, 448, 451, 481, 485, 487, 511, 512, 515, 532, or 812, and that have no more than 500 employees per physical location, and that have no more than 20 locations, and that meet all other COVID-19 EIDL eligibility requirements are eligible.
  • An entity maximum of an aggregate $10 million in COVID-19 EIDL loans to a single corporate group was added. Entities are part of a single corporate group if they are owned, directly or indirectly, by a common parent entity.

On Sept. 8, 2021, the SBA released a frequently asked questions document to help companies understand the changes that were implemented. During a time of uncertainty for many companies, access to these funds and the expansions provided by the SBA are welcomed.