On November 24th, 2021, the Small Business Administration (SBA) released a fact sheet sharing details of one of its COVID-19 recovery programs, the COVID Disaster Loan program. Generally, the Economic Injury Disaster Loan program (EIDL) assists businesses, renters, and homeowners located in regions affected by declared disasters. In March 2020, under the CARES Act, the SBA created the COVID-related version of the EIDL (COVID Disaster Loan). Previously, the SBA extended the application due date for the COVID program.
Overview of the COVID Disaster Loan Program
As mentioned before, in March 2020, Congress signed into law the CARES Act (Act). By and large, the Act declared the COVID-19 outbreak a disaster under the Small Business Act, operated by the SBA. Therefore, the declaration allowed the SBA to create EIDLs for small businesses impacted by the pandemic.
Chiefly, some requirements of the COVID Economic Injury Disaster Loan program include the following:
- Most small businesses are eligible to apply.
- The SBA does examine a business’s credit history and its ability to repay.
- Companies must show economic injury due to the coronavirus.
- Any monies loaned come directly from SBA Disaster Assistance.
- There is no cost to apply.
- Any provided funds are only for working capital (i.e., to pay fixed debts, payroll, accounts payable). The funding is not for lost sales, lost profits, or business expansion.
SBA COVID-Related Recovery Funding Statistics
In summary, the SBA’s release described the different funding programs that the agency created to help businesses during the pandemic. For instance, the SBA distributed nearly $416.3 billion in emergency aid to more than 6 million small businesses this year. The SBA provided the funding through various programs. At the present time, the programs include:
- Paycheck Protection Program ($280 billion)
- COVID Economic Injury Disaster Loan Program ($88 billion)
- Restaurant Revitalization Fund ($28.6 billion)
- Shuttered Venue Operators Grant ($13.4 billion)
- COVID EIDL Targeted and Supplemental Advance programs ($6.3 billion combined)
Employer Takeaways
In conclusion, eligible small businesses, nonprofits, and agricultural businesses can still apply for the COVID Disaster Loan Program. Accordingly, interested parties can visit http://www.sba.gov/eidl20 to learn more about eligibility and application requirements. Most importantly, the last day that applications may be received is December 31st, 2021. On account of that and the availability of funding, employers should get their applications in as soon as possible.