Roughly 75 percent of small business owners claimed that the COVID-19 pandemic gave them the hardest year of their business’s life. Many businesses have relied on the government’s EID loan policy. This policy provides low-interest loans to help small businesses remain solvent.
Have you struggled to keep your business going? Looking into small business loans for COVID? Maybe you looked into the COVID loan policy and realized you wouldn’t qualify.
In September 2021, the government made several COVID EIDL policy changes that might open new opportunities for you. Keep reading and we’ll go over the basics.
Increases To The Loan Policy Cap
The September changes increased the cap on COVID business loans from $500,000 to $2,000,000. This fourfold increase should make it easier for businesses to handle any normal operating expenses. Covered expenses include equipment purchases, payroll, and debt management.
Changes To Potential Uses Regarding Debt
In addition to general debt payment, COVID business loans can now be used to pre-pay commercial debt and pay down government debt. This allows businesses to reduce the interest rate of existing debt. This can also help get federal payments under control.
Extended Deferment
An EID loan now comes with a two-year deferment starting from the loan’s origination date. This extended deferment encourages businesses to focus on getting their feet back under them. Worrying about EID loans can take a back seat.
Existing EID business loans will also receive the new two-year deferment. These expanded deferment efforts will ensure that this policy helps those it needs to.
Affiliation Rules
The size of a business includes consideration of its affiliates. For businesses on the larger end of “small business,” tracking affiliation status can get confusing.
The SBA simplified its affiliation requirements for the COVID loan policy. An affiliate now includes any business that the applying business controls or in which it maintains over 50% ownership. This should make finishing the application process easier and speed up processing.
Exclusivity Window
Providing loans designed to shore up the situation of both Main Street businesses and large firms gets hard fast. To this end, the Small Business Administration added an exclusivity window on these changes for loan requests under $500,000. This window gives small businesses more time to access new loan funds than their larger counterparts.
Appeals And Reconsideration
The altered guidance also indicates that businesses whose applications have been declined can apply for reconsideration or an appeal under the modified guidance. Initial reconsideration attempts must arrive within six months of decline. Appeals after a reconsideration request must begin within 30 days of a rejected reconsideration.
Seize This Loan Opportunity
Changes in coronavirus loan policy may help your business. Use the funds to get situated after a years-long pandemic. If you applied for an EID loan and were rejected, don’t let this chance go to waste.
Looking for more information on the COVID-19 pandemic’s effects on both commerce and personal wellness? Check out our business and health sections.
