As our state continues the process of re-opening, I wanted to provide you with a new small business loan update regarding the Economic Injury Disaster Loan (EIDL) Program and the Paycheck Protection Program (PPP) offered through the U.S. Small Business Administration (SBA).
SBA has reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal to all eligible applicants experiencing economic impacts due to COVID-19. Previously, the program was limited to agricultural applications for a period of time.
Recently, the President signed the PPP Flexibility Act into law. This legislation, which I helped introduce in the House, provides greater flexibility to businesses who need this money to get through this challenging time. You can read more about the changes here.
Unfortunately, for some First District businesses, the terms of the PPP had proven too inflexible for employers, employees, and lenders weathering the current economic storm. This bill allows forgiveness for expenses beyond the original 8-week covered period, relaxes restrictions limiting non-payroll expenses to 25% of loan proceeds, eliminates restrictions that limit loan terms to 2 years, ensures full access to payroll tax deferment for businesses that take PPP loans, and provides a rehiring safe harbor for businesses unable to rehire employees due to the effects of enhanced Unemployment Insurance.
I’ve included additional information below that I hope you will find helpful. If you haven’t yet had the opportunity, I’d encourage you to sign up to receive my newsletters and press releases.
I’m grateful to serve as your Representative. Our full staff remains available to help with any issues you may have, so please don’t hesitate to reach out.
To further meet the needs of U.S. small businesses and non-profits, the U.S. Small Business Administration reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal to all eligible applicants experiencing economic impacts due to COVID-19 today.
“The SBA is strongly committed to working around the clock, providing dedicated emergency assistance to the small businesses and non-profits that are facing economic disruption due to the COVID-19 impact. With the reopening of the EIDL assistance and EIDL Advance application portal to all new applicants, additional small businesses and non-profits will be able to receive these long-term, low interest loans and emergency grants – reducing the economic impacts for their businesses, employees and communities they support,” said SBA Administrator Jovita Carranza. “Since EIDL assistance due to the pandemic first became available to small businesses located in every state and territory, SBA has worked to provide the greatest amount of emergency economic relief possible. To meet the unprecedented need, the SBA has made numerous improvements to the application and loan closing process, including deploying new technology and automated tools.”
SBA’s EIDL program offers long-term, low interest assistance for a small business or non-profit. These loans can provide vital economic support to help alleviate temporary loss of revenue. 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.
For additional information, please visit the SBA disaster assistance website at SBA.gov/Disaster.
To implement the PPPFA, SBA revised its first PPP interim final rule, which was posted on April 2, 2020. As described in detail in our announcement on June 8, 2020, the new rule updates provisions relating to loan maturity, deferral of loan payments, and forgiveness provisions.
In addition, as an exercise of SBA’s policy discretion in furtherance of President Trump’s leadership and bipartisan support on criminal justice reform, the eligibility threshold for those with felony criminal histories has been changed.
The look-back period has been reduced from 5 years to 1 year to determine eligibility for applicants, or owners of applicants, who, for non-financial felonies, have (1) been convicted, (2) pleaded guilty, (3) pleaded nolo contendere, or (4) been placed on any form of parole or probation (including probation before judgment). The period remains 5 years for felonies involving fraud, bribery, embezzlement, or a false statement in a loan application or an application for federal financial assistance. The application also eliminates pretrial diversion status as a criterion affecting eligibility.
SBA issued revised PPP application forms to conform to these changes. The guidance and revised application forms are available on SBA’s and Treasury’s websites. SBA will issue additional guidance regarding loan forgiveness and a revised forgiveness application to implement the PPPFA in the near future.
The following entities affected by Coronavirus (COVID-19) may be eligible: