The patchwork system of relief programs small businesses are depending on for weathering the COVID-19 pandemic has undergone several iterations now. Many of the changes have expanded the availability of funds to businesses left out of earlier rounds of stimulus or made it possible for them to combine programs. The rules governing who can get what can be quite confusing. Small businesses can now get a second Paycheck Protection Program (PPP) loan, but can they get multiple EIDL loans?
Below, well try to clear up some of the confusion around Economic Injury Disaster Loans (EIDL) and how they combine with other programs. But first, lets detail the expansion of the EIDL program that has recently been made.
The SBA Has Raised The Loan Limit For The EIDL Program
Starting the week of , the SBA is raising the loan limit for the COVID-19 EIDL program from 6-months of economic injury with a maximum loan amount of $150,000 to up to 24-months of economic injury with a maximum loan amount of $500,000.
If youve received an EIDL loan subject to the old limits, you do not need to submit a request for an increase, as the SBA will reach out directly to you via email and provide more details about how you can request an increase in your loan amount. All new loan applications and any loans in-process when the new loan limits are implemented will automatically be considered for loans covering 24 months of economic injury up to a maximum of $500,000.
You Cant Apply For A Second EIDL Loan
This is a point of confusion for many small businesses because another program administered by the SBA, PPP loans, now allows certain qualifying businesses to apply a second time.
EIDL loans, while they arent forgivable like PPP loans, have incredibly long term lengths of up to 30 years, with fixed interest rates of 3.75%. With payments deferred until 2022, these loans offer a lot of flexibility and fill a slightly different niche than PPP loans, which have more of a short-term scope. While the SBA now allows businesses to receive both an EIDL loan and a PPP loan without any conflict, you still can only be approved for an EIDL loan once.
Additionally, many businesses confuse EIDL loans with other SBA-run programs, such as Physical Damage Loans. These loans are designed to mitigate losses that result from your place of business being their explanation physically damaged by weather events, geological events, or civil unrest. You should be aware that you can get both an EIDL loan and a Physical Damage Loan if both situations apply to you and your community has been declared a disaster area.
You Might Be Able To Increase Your EIDL Size
It may seem counterintuitive, but while you cant apply for an EIDL loan a second time, it is possible to get more money through your open EIDL loan case.
If you received less than $500,000 in COVID-19 EIDL funds, you can request an increase in your existing EIDL loan. You can request this increase either before or after youve accepted the loan. The SBA recommends that if youre in urgent need of funds, you accept the maximum amount currently being offered and then send a request for additional funding.
The additional amount that you can qualify for seems to be capped at six months of revenue for most cases. The amount is determined using a six-month period in 2019.
To request an increase, youll need to contact the SBA directly. The SBA recommends that those interested send an email to with the word ‘INCREASE in the subject line. Youll also want to attach your most recent federal tax return along with a signed IRS Form 4506-T. You can attach Form 3502 as well if you need to correct your financial situation.
Some Small Businesses Can Get More Funding From The Targeted EIDL Grant Program
Toward the beginning of the pandemic, the SBA offered successful EIDL applicants up to $10,000 of their aid in grant form. These were called EIDL Advances. That program was not renewed when it ran out of money. However, a more restrictive successor program called the Targeted EIDL Advance was introduced in s Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act.
- Have 300 employees or less
- Have experienced a 30% or greater loss of revenue between 2019 and 2020.
- Be located within a low-income area.
Additionally, if you received the previous version of the grant, you can still get no more than $10,000 in total grants. So if you got $5,000 last year, the maximum you could get from a Targeted EIDL loan is $5,000.
Currently, you cant apply for Targeted EIDL Advances. Instead, the SBA is sending invitations to businesses that only received partial funding on their EIDL Advance from 2020 and businesses that previously applied and received nothing due to the program running out of money.
The Deadline To Apply For EIDL Funding For COVID Relief Is
If you havent yet applied for an EIDL loan, you still can. The official deadline for EIDL grant applications is . You probably shouldnt wait, though, as these programs do have finite funding, and theres no telling whether there will be additional rounds of funding down the road.
If youre waiting on a Targeted EIDL Advance, you should know that first priority applicants started receiving invitations on . Now that the initial 28-day period is up, second priority businesses should be receiving invitations. Once youre received an invitation, it takes around 21 days to process your case.
EIDL Loans For COVID Relief: FAQs
No, you can only get a single EIDL loan. It ount youre borrowing, however, so long as you took out less than the maximum amount of $500,000.
Whether or not the SBA runs out of EIDL funding depends on how popular the program remains and whether Congress keeps it funded. Most COVID-related programs were exhausted by the fall of 2020 before receiving additional funding in December, so Id recommend against waiting.
EIDL is a disaster-based long-term loan offered directly through the SBA; the PPP is a forgivable medium-term loan offered through the SBAs lending partners and is designed to cover specific expenses. You can read about the difference in our PPP VS EIDL breakdown.
More Funding Options For COVID Relief
EIDL loans are just one part of the federal governments economic response to the COVID-19 pandemic. If youve maxed out your EIDL loan, or you dont think its the right option for your business, you have other options. Check out our guides for information on other programs that can provide your small business with relief.