Though not noted in its recent news release announcing that the application portal would reopen for certain agricultural businesses now eligible for the SBA’s Economic Injury Disaster Loan (EIDL) and EIDL Advance programs, it has been widely reported that the program has been crushed by applications.
The SBA stopped accepting new applications on April 15, 2020, after the initial funding provided in the CARES Act was depleted. However, an additional $50 billion was provided through the Paycheck Protection Program and Health Care Enhancement Act, enacted on April 24, 2020.
New applications are now being accepted on a limited basis only from eligible farmers, ranchers and certain other agricultural businesses. Previously submitted applications from other businesses will be reviewed on a first-come, first-served basis. The agency has been overwhelmed with new applications, and it is estimated that they currently have a backlog of in the millions.
The number of applicants attempting to get economic relief through the EIDL program has been so high that additional restrictions have been put into place by the SBA. Not only have new applicants been limited to eligible agricultural businesses, but the historical $2 million loan cap has also been reduced to just $150,000 per applicant.
The EIDL program is offered through the SBA’s long-standing Section 7(b) loan program. It differs from the Paycheck Protection Program (PPP) included in the CARES Act in that EIDL loans are handled directly through the SBA, while the PPP loan program is handled through banks. Thus, all processing of EIDLs falls within the purview of the Agency.
Questions and comments can be forwarded to Bob Grossman or Don Johnston or your GYF Tax Executive at 412-338-9300.
Related Posts:
Paycheck Protection Program Loans – Round 2
Loans for Mid-Sized Businesses Under the CARES Act
Comparing Small Business Relief Packages
Economic Injury Disaster Loans (EIDL) Under the CARES Act
Paycheck Protection Program Loans (PPP) Available Under the CARES Act
