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Disaster Loans Available for Mississippi Businesses
SBA EXPANDS EIDL PROGRAM
The U.S. Small Business Administration (SBA) recently announced significant improvements to the Economic Injury Disaster Loan (EIDL) program, as it seeks to loan out $150 billion in available funding. The SBA is implementing the following key changes in hopes to make it easier for small businesses to recover from the economic hit from the pandemic:
- Quadrupling the COVID-19 EIDL loan limit from $500,000 to $2,000,000.
- Expanded use of proceeds – Loan proceeds can be used for normal operating expenses, including payroll, rent (or mortgage payments), utilities, and other operating expenses, as well as for purchasing equipment, paying debt, and working capital. Under these new terms, loan proceeds can be used to make debt payments, including monthly installments, deferred interest, and prepayment on business debt, whether the loan was incurred before or after submitting an SBA loan application. Previously, funds could only be used for working capital needed to sustain the business until it could resume normal operations.
- Longer deferred payment period – Under the revised program, loan repayments will not begin until two years after loan origination. Debt payments are deferred for the first two years, during which time interest will accrue, with payments of principal and interest made over the remaining 28-year loan term. The loan can be prepaid at any time without penalty.
- 30-day exclusivity window – To ensure Main Street businesses have time to access these funds, the SBA is implementing a 30-day exclusivity window for approving and dispersing loans of $500,000 or less. Approval and disbursement of loans over $500,000 will begin on October 8, 2021.
For more information, call the SBA’s Customer Service Center at 1-800-659-2955 or visit the SBA’s COVID-19 EIDL resource page.
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