September 10, 2021
Dear Clients, Colleagues and Friends,
On September 8, 2021, the U.S. Small Business Administration announced that it is increasing the maximum amount small businesses and non-profit organizations can borrow through its COVID-19 Economic Injury Disaster Loan (EIDL) program. Starting on October 8, 2021, for loans greater than $500,000, the SBA is increasing the loan limit from $500,000 to $2 million.
In addition to the maximum limit change, the SBA announced the following changes to the program:
- Use of funds was expanded to include payment and pre-payment of business non-federal debt incurred at any time (past or future) and payment of federal debt
- Extended the deferment period to 24 months from origination for all loans (existing loans with a less than 24-month deferment will be adjusted)
- Affiliation requirements simplified to: “an affiliate is a business that you control or in which you have 50% of more ownership”
- Developed an additional path to meet program size standards for businesses assigned a NAICS code beginning with 61, 71, 72, 213, 3121, 315, 448, 451, 481, 485, 487, 511, 512, 515, 532, or 812
- Exclusivity Period: From September 8, 2021 to October 8, 2021, the above policy changes will be applicable to applications for <$500K while applications for >$500K will not be approved and therefore receive the policy changes until October 8, 2021
- Added $10 million limit on maximum aggregate COVID EIDL loans to a single corporate group. Entities are part of a single corporate group if they are majority owned, directly or indirectly, by a common parent.
For loans greater than $500,000, applications will not be approved until after the exclusivity period ends on October 8, 2021, but they can be submitted before then. Applicants can choose to apply for $500,000 or under immediately and then for over $500,000 funds after the exclusivity period ends, or they can choose to apply immediately for all desired funds above $500,000 and have their application wait for approval starting October 8, 2021.
For all of our COVID-19 updates, please visit our website at www.pntax.com and our COVID-19 updates page at https://www.pntax.com/covid-19/.
If you have any questions or need further information, please contact your Presti & Naegele professional directly, or dial 212-736-0055 for immediate assistance.
Presti & Naegele