Last week, the Small Business Administration (SBA) essentially shutdown the Economic Injury Disaster Loan (EIDL) to small business. The World Floor Covering Association has issued the following statement and guidance regarding the change:
“In response to the Coronavirus pandemic, Congress passed the Coronavirus Aid, Relief and Economic Security (CARES) Act. The Act allowed businesses with less than 500 employees to apply for a SBA EIDL. These loans included a ‘forgivable’ advance of up to $10,000 that does not have to be repaid.
Last week, the SBA essentially shutdown the EIDL program to large swaths of the economy. The SBA has limited the EIDLs to a maximum loan of $150,000 and limited the loans to ‘[a]gricultural businesses includes those businesses engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries.’ EIDLs with the $10,000 advance are no longer available to small businesses in other industries at this time.
There are, however, other loan programs available. The Payroll Protection Program (PPP) loans are still being processed by the SBA, and there are also a host of other SBA loans, including the SBA’s Express Bridge Loan Pilot Program that allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 with less paperwork, and SBA Access to Capital, which provides a number of loan resources for small businesses to utilize when operating their business.
In addition, the Federal Reserve recently created a brand new lending program known as the ‘Main Street Lending Program,’ with loans of $500,000 to $25 million. These loans are for four years, at 1% to 3% interest, with principal and interest payments deferred for one year.
Many states and local governments have set up loan and grant programs to help small businesses weather the COVID-19 crisis. To check out programs in your state, visit here. You can also contact your state’s Governor’s office who should provide you with information on local programs.
WFCA continues to review all available updates to these loan and grant programs and will advise members if the SBA opens up the EIDL program to non-agriculture businesses, as well as any other updates regarding their opportunities and obligations during the COVID-19 crisis. In the meantime, please feel free to send your concerns or questions directly to firstname.lastname@example.org and email@example.com.
Notice: The information contained in this update is abridged from legislation, court decisions, and administrative rulings, and should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel.‘