Editor’s Note: At Lantern, we strive to help you make financial decisions with confidence. To do this, we occasionally feature content that includes information about our partners and their products or services. We do not provide, endorse, or guarantee any third-party product, service, information or recommendations—and our opinions are our own.
The COVID-19 pandemic has been a very long emergency. Small businesses dealing with the pandemic and perhaps other disasters as well may be searching for any and all relief available to them. The Small Business Administration (SBA) offers emergency funding through its Economic Injury Disaster Loan (EIDL) program.
In normal times, EIDLs are available to businesses located in areas where a declared disaster, such as a hurricane or wildfire, took place. But in 2020, the SBA also implemented a separate COVID-19 EIDL program for businesses across the country that were negatively impacted by the pandemic. How much can you really borrow for your small business through the EIDL program right now? Find out whether or not you can get more than one EIDL.
Related: How to prepare for the dry spell in your small business
Can you apply for an EIDL loan twice?
If you’re wondering if you can apply for a second EIDL, the answer is “it depends.” Here are three different scenarios to illustrate how the process works:
- Your original EIDL application was denied. In this case, you should have received a reason for why your application wasn’t accepted. If you can address the SBA’s concerns, then you can initiate an EIDL reconsideration request.
- You want a second EIDL. You may apply for only one COVID-19 EIDL. But if your business is located in a declared disaster area and it experienced additional economic injury, you may apply for a separate EIDL as well as a COVID-19 EIDL.
- You received COVID-19 EIDL funds before the loan limit increased either in April 2021 or in September 2021. In either case, you can request a larger loan amount. Technically, this isn’t considered getting an additional loan. Rather, you’re simply taking advantage of new rules regarding loan limits. The SBA will contact you if you’re eligible for additional funds.
Can you increase your EIDL size?
In some cases. The SBA increased the size of COVID-19 EIDLs, starting with loans approved April 7 or later. That maximum loan amount was $500,000. As of Sept. 8, the maximum has been increased again, this time to $2 million. To check your eligibility, compare the new loan limit to your current loan amount. While there’s no direct way to apply for more funds on the SBA’s public website, you should receive instructions from the SBA on how to move forward if you choose.
EIDL size standards
In order to qualify for COVID-19 EIDLs, eligible businesses must have 500 employees or fewer. In addition to small businesses, agricultural enterprises and co-ops meeting the same employee limits may also qualify for a COVID-19 EIDL.
SBA size standards
Many SBA financing programs refer to “size standards.” This is the maximum size a company can be and still qualify as a small business. Each industry has its own size standard. Business owners can use the SBA’s Size Standard Tool to check eligibility.
PPP size standards
Looking at another program created to help stem the financial impact of the COVID-19 pandemic, Paycheck Protection Payment (PPP) borrowers could meet size standards in a few different ways. In order to be considered small businesses they must qualify using one of the following size standards:
- 500 employees or fewer
- Average annual receipts less than the industry-specific threshold (you can use the Size Standard Tool to check)
- Alternative-based measures such as net worth and/or net income
How to request an increase to your existing EIDL loan
The SBA website links to the requirements and the form to request an increase to your COVID-19 EIDL loan. SBA loan rates are typically much lower than those for private loans for small businesses. So if your business does need additional funding, this could be a good opportunity. However, EIDL loans are not forgivable. Unlike PPP loans, they must be repaid in full. Plus, that maturity term can be as long as 30 years. That’s a long time for your business to repay debt if the funds aren’t actually needed. So it’s generally wise not to borrow more than you need.
EIDL maximum loan amounts
As of Sept. 8, 2021, the SBA raised its COVID-19 EIDL limits. When calculating your EIDL loan amount, the current limit is $2 million. Any COVID-19 EIDL amount over $25,000 requires collateral, typically in the form of a general security agreement from the SBA. This uses your business assets as collateral for the loan. The good news is that you don’t have to offer a personal guarantee to qualify for these funds.
PPP maximum loan amounts
The PPP program is separate from the COVID-19 EIDL program and its maximums are very different. First, draw PPP loans came with a maximum loan amount of $10 million. The second round of funding was limited to $2 million. Businesses could calculate their eligible limit by multiplying their monthly payroll costs by 2.5, or by 3.5 if in the food or hospitality industry.
When is the deadline to apply for EIDL funding for COVID-19 relief?
COVID-19 EIDL applications must be submitted by December 31, 2021. However, you can still request additional funds after the deadline. If you borrowed less than you were offered and subsequently changed your mind, you have two years after the loan promissory date.
The Takeaway
Navigating your company’s finances during a pandemic or other disaster is complicated. You can make it a bit easier by comparing several small business loan options with one simple online form.
Learn more:
This article originally appeared on LanternCredit.com and was syndicated by MediaFeed.org.
Lantern by SoFi:
This Lantern website is owned by SoFi Lending Corp., a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license number 6054612; NMLS number 1121636. (www.nmlsconsumeraccess.org)
All rates, fees, and terms are presented without guarantee and are subject to change pursuant to each provider’s discretion. There is no guarantee you will be approved or qualify for the advertised rates, fees, or terms presented. The actual terms you may receive depends on the things like benefits requested, your credit score, usage, history and other factors.
*Check your rate: To check the rates and terms you qualify for, Lantern conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender(s) you choose will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
All loan terms, including interest rate, and Annual Percentage Rate (APR), and monthly payments shown on this website are from lenders and are estimates based upon the limited information you provided and are for information purposes only. Estimated APR includes all applicable fees as required under the Truth in Lending Act. The actual loan terms you receive, including APR, will depend on the lender you select, their underwriting criteria, and your personal financial factors. The loan terms and rates presented are provided by the lenders and not by SoFi Lending Corp. or Lantern. Please review each lender’s Terms and Conditions for additional details.
Personal Loan:
SoFi Lending Corp. (“SoFi”) operates this Personal Loan product in cooperation with Even Financial Corp. (“Even”). If you submit a loan inquiry, SoFi will deliver your information to Even, and Even will deliver to its network of lenders/partners to review to determine if you are eligible for pre-qualified or pre-approved offers. The lenders/partners receiving your information will also obtain your credit information from a credit reporting agency. If you meet one or more lender’s and/or partner’s conditions for eligibility, pre-qualified and pre-approved offers from one or more lenders/partners will be presented to you here on the Lantern website. More information about Even, the process, and its lenders/partners is described on the loan inquiry form you will reach by visiting our Personal Loans page as well as our Student Loan Refinance page. Click to learn more about Even’s Licenses and Disclosures, Terms of Service, and Privacy Policy.
Student Loan Refinance:
SoFi Lending Corp. (“SoFi”) operates this Student Loan Refinance product in cooperation with Even Financial Corp. (“Even”). If you submit a loan inquiry, SoFi will deliver your information to Even, and Even will deliver to its network of lenders/partners to review to determine if you are eligible for pre-qualified or pre-approved offers. The lender’s receiving your information will also obtain your credit information from a credit reporting agency. If you meet one or more lender’s and/or partner’s conditions for eligibility, pre-qualified and pre-approved offers from one or more lenders/partners will be presented to you here on the Lantern website. More information about Even, the process, and its lenders/partners is described on the loan inquiry form you will reach by visiting our Personal Loans page as well as our Student Loan Refinance page. Click to learn more about Even’s Licenses and Disclosures, Terms of Service, and Privacy Policy.
Student loan refinance loans offered through Lantern are private loans and do not have the debt forgiveness or repayment options that the federal loan program offers, or that may become available, including Income Based Repayment or Income Contingent Repayment or Pay as you Earn (PAYE).
Notice: Recent legislative changes have suspended all federal student loan payments and waived interest charges on federally held loans until 09/30/21. Please carefully consider these changes before refinancing federally held loans, as in doing so you will no longer qualify for these changes or other future benefits applicable to federally held loans.
Auto Loan Refinance:
Automobile refinancing loan information presented on this Lantern website is from MotoRefi. Auto loan refinance information presented on this Lantern site is indicative and subject to you fulfilling the lender’s requirements, including: you must meet the lender’s credit standards, the loan amount must be at least $10,000, and the vehicle is no more than 10 years old with odometer reading of no more than 125,000 miles. Loan rates and terms as presented on this Lantern site are subject to change when you reach the lender and may depend on your creditworthiness. Additional terms and conditions may apply and all terms may vary by your state of residence.
Secured Lending Disclosure:
Terms, conditions, state restrictions, and minimum loan amounts apply. Before you apply for a secured loan, we encourage you to carefully consider whether this loan type is the right choice for you. If you can’t make your payments on a secured personal loan, you could end up losing the assets you provided for collateral. Not all applicants will qualify for larger loan amounts or most favorable loan terms. Loan approval and actual loan terms depend on the ability to meet underwriting requirements (including, but not limited to, a responsible credit history, sufficient income after monthly expenses, and availability of collateral) that will vary by lender.
Life Insurance:
Information about insurance is provided on Lantern by SoFi Life Insurance Agency, LLC.
The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Featured Image Credit: designer491/istock.
