SBA Proposes Changes to the COVID-19 Economic Injury Disaster Loan (EIDL) Program


By: Pat Gouhin, Chief Executive Officer

The Small Business Administration has proposed changes to the COVID-19 Economic Injury Disaster Loan (EIDL) that may provide opportunities and ways to leverage the program for portfolio companies who are looking for capital.   With $250 billion remaining in the EIDL program, the SBA is trying to provide what they are calling “patient capital” to help companies bridge this rebuilding phase as the economy gains momentum. They are announcing changes to the program to directly help the hardest hit, which includes industries including hotels, restaurants, gyms and others.

The new EIDL loans will provide:

  • Immediate 36 month deferment (to factor in this current period as companies rebuild)
  • 3.75% fixed rate for 30 years
  • No pre-payment penalty
  • Will allow for proceeds to go toward pre-pay existing debt, including SBA loans
  • The current affiliation waiver rules will likely remain

The formula will be based on 2019 gross sales----2019 COGS x 2= loan amount up to $2,000,000.  The SBA hopes for these changes be implemented and go live on July 15, 2021 through the COVID-EIDL SBA portal after final approval from the Office of Management and Budget.  The SBA goal is for these new standards in forgiveness will help small businesses build back better.

Visit the SBA website to stay current on the Economic Injury Disaster Loan (EIDL) Program.

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