We have an exciting update for you about the EIDL loan that you don’t want to miss.
Action is required so please read until the end.
We’re not going to waste any more time so let’s get right into it.
EIDL Loan Increase Amount
The SBA just expanded the EIDL loan in two major ways:
1. First, the max loan amount was increased from a $150,00 max loan amount to a max loan amount of $500,000.
This is more than 3x the original amount and this is good. This is great for the small businesses and non-profits that need this money!
We’ve always thought the $150,000 max loan amount was too little, and we’re glad to see the SBA has finally increased it. It’s about time.
2. The SBA increased the economic injury coverage period from 6-months to 24 months of economic injury.
That is huge! Not only can you borrow more money, but you can now get 24 months of relief.
SBA Administrator Speaks
Here’s what the SBA Administrator, Isabella Casillas Guzman had to say about the increase:
“More than 3.7 million businesses employing more than 20 million people have found financial relief through SBA’s Economic Injury Disaster Loans, which provide low-interest emergency working capital to help save their businesses. However, the pandemic has lasted longer than expected, and they need larger loans. Many have called on SBA to remove the $150,000 cap. We are here to help our small businesses and that is why I’m proud to more than triple the amount of funding they can access.”
We agree wholeheartedly with everything Isabella Casillas Guzman said and we know you do too.
So, let’s talk about what all of this means for you and how you can get the increased limits and timeframe.
And that is whether you already received the loan or this will be your first time applying.
Email from SBA on Loan Increase
If you have already received the EIDL loan, you should have gotten an email in your inbox from the SBA sometime between April 6th and now.
Let’s take a look at the email.
If you don’t see an email from the SBA, make sure to check the email you used for your original application, and be sure to check spam too.
We’ve been hearing a few people mention that they found theirs in spam.
Also, not all emails have been sent out yet due to the sheer number of people who received the loan.
If you did not get the email, you can still use the steps we are about to go over to request an increase. So don’t panic!
Here is the first half that gives an overview of the loan increase limit:
The second half of the email goes into detail on how you can request an increase:
Steps to Increase EIDL Loan Amount
Here are the steps outlined within the email.
Step 1: Send an email to [email protected]. Don’t forget the “s” on “requests there.
Step 2: Use the subject line “EIDL Increase Request for [insert your 10-digit application number]”.
You should be able to find your application number in previous emails regarding your loan.
Step 3: Include in the body of your email identifying information for your current loan including:
- application number
- loan number
- business name
- business address
- business owner name(s)
- phone number
Step 4: Lastly, do not include any financial documents or tax records with your initial request. SBA will send a follow-up email notification if it needs additional documents.
Tips and Tricks to Get Approved
Here are a few things to know about sending the email.
1. Some people have been receiving an auto-reply and others have not.
If you don’t receive an auto-reply and don’t get an email bounce back, your request should have gone through.
2. Only send one email.
If you send multiple, it may restart your position to get a response or could slow down the overall response time.
In the bottom half of the email, the SBA does state that:
“Due to high volume of incoming requests, SBA reports it may be several weeks before a response is received from the agency on the next steps to follow. Those who request a loan increase should not resend multiple requests if they do not hear back right away from the SBA as the extra emails could slow down the overall response time.”
We know you may get antsy if you don’t hear back from anyone, but please only send one email so you can maintain a good spot in line to hear back.
You’d think the SBA would have a better system than email to ask for an increase.
But, we guess we should know better by now based on previous rollouts of everything related to PPP loan or the EIDL.
What Documents are Needed?
It appears that most people are not having to submit any additional document requests.
Those who do have to submit extra docs typically are asked for 2019 taxes and 4506-Ts and look to be new businesses or bad credit.
We are also seeing reports of people in Facebook groups & on Reddit who are seeing 3x their initial loan amount.
How to Apply for EIDL Loan for the First Time?
Now, that was instructions for those who have already received an EIDL.
If you are thinking about applying or have recently applied and waiting for a response…
…you will automatically be considered for the $500,000 max loan limit and the increase of 24 months of coverage, according to the SBA.
You can go to sba.gov and if you scroll down a bit you will see a big icon that says EIDL.
If you click that, it will take you to the page where you see the loan detail and can also apply.
EIDL Loan Terms to Know
As of now, the loans carry the following terms:
- Non-forgivable, Fixed 3.75% interest rate for businesses or
- Non-forgivable, Fixed 2.75% interest rate for nonprofits
- 30 years term
- No pre-payment penalty or fees
- Up to $500,000 loan amount
- 24 months of coverage for your business.
We’re ultimately excited about the increase in limits and loan amounts.
And, we truly hope that the SBA moves with speed so the small businesses and non-profits get the help they need and deserve.
Speaking of small businesses, as CPAs and business owners ourselves, we know how important effective financial management is to growing a business.
This is especially true for small and start-up companies.
So, if you need more guidance with your business’ finances, here at LYFE Accounting, we offer financial advisory services as well. Talk to us today to get started!