Daily Coronavirus Update: Economic Injury Disaster Loan Applications Reopened for Small Businesses and Non-Profits
Good evening Members,
The U.S. Small Business Administration (SBA) has reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal to all eligible applicants experiencing economic impacts due to the coronavirus pandemic.
The SBA previously shut down the portal in mid-April after funding was exhausted from the CARES Act.
EIDL assistance can be used to cover payroll and inventory, pay debt or fund other expenses. Additionally, the EIDL Advance will provide up to $10,000 ($1,000 per employee) of emergency economic relief to businesses that are currently experiencing temporary difficulties, and these emergency grants do not have to be repaid.
The SBA’s COVID-19 EIDL and EIDL Advance federal low interest loans for working capital to small businesses and non-profit organizations may be used to pay debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact, and that are not already covered by a Paycheck Protection Program loan.
The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%.
To keep payments affordable for small businesses, SBA offers loans with long repayment terms, up to a maximum of 30 years. Plus, the first payment is deferred for one year.
Additionally, as part of their loan application, small businesses and non-profits may request an EIDL Advance of up to $10,000. The EIDL Advance is designed to provide emergency economic relief to businesses that are currently experiencing a temporary loss of revenue. This advance will not have to be repaid, and small businesses may receive an advance even if they are not approved for a loan.
The SBA, in coordination with the Department of the Treasury, has posted a revised Paycheck Protection Program (PPP) loan forgiveness application implementing the PPP Flexibility Act of 2020, which was signed into law by President Donald Trump on June 5.
In addition to revising the full forgiveness application, the SBA also published a new “EZ” version of the forgiveness application that applies to borrowers who are self-employed and have no employees; or did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number or hours of their employees; or experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of their employees by more than 25%.
Officials said the EZ application requires fewer calculations and less documentation for eligible borrowers. Details regarding the applicability of these provisions are available in the instructions to the new EZ application form.
Both applications give borrowers the option of using the original eight-week covered period if their loan was made before June 5, 2020 or an extended 24-week covered period. These changes, according to the SBA, will result in a more efficient process and make it easier for businesses to realize full forgiveness of their PPP loan.
Thursday, June 18 – Charitable Giving During the Coronavirus Pandemic.
Thursday, June 18 – COVID-19 and Your Financial Health: What You Need To Know Right Now.
Latest NYSBA.ORG Coronavirus News
We are adding new content each day to our website related to the coronavirus public health emergency and its impact on the legal community.
Today we have coverage of Chief Judge Janet DiFiore’s announcement that NYSBA’s immediate past president Hank Greenberg will chair the newly formed Commission to Reimagine the Future of New York’s Courts. Greenberg said the COVID-19 pandemic “offers a unique opportunity to reimagine how courts deliver services and consider innovative proposals for the justice system of the future.”
Also, reservations are strongly recommended as we take a look at reopening New York’s restaurants.