The Economic Injury Disaster Loan (EIDL) program has been the key enabling many businesses to remain afloat throughout the difficult times they have faced during the COVID-19 pandemic. As the fallout from this virus continues to wreak havoc on various industries and business sectors, the Small Business Administration (SBA) has made additional modifications to the EIDL program in order to further assist businesses that have been significantly affected by the pandemic and require further relief.  

Qualifying for EIDL  

As a reminder, to be eligible for a loan under the EIDL program, a business must be located in an SBA-specified low-income community and must have suffered reductions of revenue as a result of the COVID-19 pandemic.  

Yesterday, the SBA announced that they would increase the cap on loans issued through the EIDL program from $500,000 to $2 million. They also added business debt payments as a way that businesses can use the loan proceeds.  

These changes are all effective immediately. The key takeaways from yesterday’s announcement include:  

  • An increase in the cap on loans granted through the EIDL program from $500,000 to $2 million - These proceeds can be used for normal operating expenditures and working capital such as payroll, equipment purchasing, and paying down existing or new debt (commercial and federal debts)
    • Debt payments include monthly installments, deferred interest, and pre-payment on business debt
  • A deferral of payment period – Payments on EIDL loans will not begin until two years after origination, during which time interest will accrue. This is a change from the original 18-month deferral. Payments will then be made over the remaining 28 years.
  • An exclusivity window – The SBA is granting a 30-day exclusivity window of approving and disbursing funds of loans $500,000 or less to ensure Main Street businesses have the access they need for these funds. Loans over $500,000 will be approved and disbursed after the 30-day period.
  • The affiliation requirements get simpler – Rules now mimic those of the Restaurant Revitalization Act.
  • Expanding eligibility – Organizations with no more than 500 employees per physical location (provided the business, with its affiliates, has no more than 20 locations)  

The terms of these loans are as followed:  

  • 30-year term
  • Fixed interest of 3.75% for businesses, sole proprietors, and independent contractors and 2.75% for non-profit organizations
  • Program is open through December 31, 2021
  • Limited to $2,000,000 (limit is $10 million for corporate groups who have multiple entities who receive loans under the program)
  • Collateral and personal guarantees vary based on loan amount 

If you have any questions or are interested in learning more, please email me at chris.martin@sobelcollc.com


Chris Martin, Member of the Firm in the Accounting and Auditing Practice at SobelCo, has worked closely with mid-sized, privately-held businesses throughout his entire career. He adds value by assisting clients with their financial statement needs, providing strategic planning for their corporate and individual income taxes, and taking an active role in consulting on major financial decisions.  Chris devotes a significant amount of his time specifically in SobelCo’s food and beverage practice where he manages financial statement audits, reviews, compilations, and income taxes for manufacturers, distributors, and supermarket owners in the tri-state area.