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Time is running out to apply for Economic Injury Disaster Loans

The program officially ends on December 31, but strongly encourages businesses to apply by December 10.
Photo by Konstantin Evdokimov on Unsplash
The application period for the EIDL program is quickly approaching an end. Although the program officially ends on December 31, the SBA recently released a memo that strongly encourages businesses to apply by December 10. The SBA stated that while applications will be available until the end of the year, it may not be able to process applications for the EIDL Supplemental Targeted Advance program that are received after December 10.

A few weeks ago, we reported that the SBA had made significant changes to this program, both in terms of how the funds can be spent and how the maximum loan amount will be calculated. The SBA has stated that the formula for calculating the maximum amount of the loan is:

(Annual Revenue – Cost of Goods Sold) * 2

Note that there is no factor for revenue losses in the above calculation. The SBA appears to have determined that small businesses may have been impacted by a tightening of the credit market during the pandemic and may be eligible for an EIDL to assist with working capital issues even if no loss in revenue has occurred.  

The EIDL has extraordinarily favorable funding with a 3.75% interest rates, 30-year term, no personal recourse for amounts under $200,000 and no payments for 12 months. Businesses struggling with inflationary price increase and supply side challenges are encouraged to consider an EIDL . The Boulder SBDC has consultants available to assist with these considerations and the application process.

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