SBA's $10,000 Disaster Loans Come With New Caveats. New details limit the scope of the economic injury disaster loans (EIDL) meant to provide businesses with immediate, emergency cash. As the economic pause caused by coronavirus endures, businesses are racing to understand and access the $350 billion in loans provided by the CARES Act to help impacted small businesses. Emergency loans are newly available to sole proprietors, and new guidance accompanies this relief. Estimates indicate the total amount of aid isn’t enough to address current needs, and Congress is considering extending more funds to small businesses.
By Kevin J. Ryan, INC. (retrieved online 4/9: https://www.inc.com/kevin-j-ryan/small-business-loans-eidl-advance-limitations.html
High demand for Economic Injury Disaster Loans (EIDL) has led to important changes limiting the size of the payouts for some small-business owners. While small-business owners across America line up to get their Paycheck Protection Program (PPP) loans--a process that has been a bit chaotic--the Treasury Department has touted the EIDL as a stopgap option. Small businesses that apply for EIDLs can request an advance of up to $10,000.
Now, there are some caveats. The U.S. Small Business Administration's Massachusetts District Office announced in a bulletin on April 6 that, nationwide, the SBA has decided to implement a $1,000 cap per employee on the advance, up to a maximum of $10,000. So, a business with three employees, for example, would be eligible to receive only $3,000 up front, as opposed to the originally stated $10,000.Â
The bulletin states the advances will be distributed beginning this week. In a separate announcement, U.S. Senator Brian Schatz of Hawaii, who serves on the Senate's banking, housing, and urban affairs committee, said the change is the result of high demand for the loans.Â
This Friday, April 10 at noon ET, Inc. and the U.S. Chamber of Commerce will team up for a third virtual National Small Business Town Hall to help small business owners and sole proprietors alike navigate the programs that are available to them. Inc. Editor-At-Large Kimberly Weisul will moderate a discussion with the U.S. Chamber’s Executive Vice President and Chief Policy Officer Neil Bradley to lay out the new guidance for sole proprietors, address the steps all impacted businesses should take to tap into available resources, and discuss the potential for more aid in the future.
A panel of business experts will join them to questions from business owners of all sizes, and to offer counsel to anyone attempting to access the loans the CARES Act provides.
REGISTER HERE: https://events.inc.com/nationaltownhallevents