Congress had initially funded the EIDL grant initiative with $10 billion under the March CARES Act, but the funds were depleted quickly, forcing the SBA to suspend the program and the EIDL loans. EIDL loans were reopened because of April’s House Resolution 266 where lawmakers added another $10 billion in grant money and $50 billion in EIDL loan dollars.
In order to ensure that small businesses can access the loans, the SBA said that they made several improvements to the application and loan closing process.
What is the purpose of the EIDL loans and grant program?
The SBA knows that small businesses have been hit very hard by COVID-19 shutdowns and stay at home orders across all states. They also know that small businesses are vital to the national economy and that without help, many small businesses could go under and cause a deep recession. The loans and grant program are meant to keep as many small businesses afloat during this time until they are able to get back on their feet.
Who qualifies for an EIDL loan?
As of June 15, 2020, small business owners and qualified agricultural businesses (those with 500 or fewer employees) in all U.S. states and territories are ,eligible to apply for an EIDL loan. An agricultural business is one that is involved in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries (as defined by section 18(b) of the Small Business Act (15 U.S.C. 647(b)).
What business financial information is needed for EIDL loans?
Applicants are being encouraged to apply online using the Electronic Loan Application (ELA) on SBA’s secure website at ,https://disasterloan.sba.gov/ela
What are the terms of the EIDL loans?
According to a ,news release by the SBA, the terms of the EIDL loans are:
- Interest rate of 3.75 percent for small businesses (2.75 percent for non-profits)
- Up to 30-year loan
- Deferable for a year
- Loans may be used for “debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact, and that are not already covered by a Paycheck Protection Program loan”
- Loan applicants are allowed to ask for an advance of $1,000 per employee up to a combined $10,000. The advance will not have to be repaid and can be received even if the business is not approved for a loan.
See the latest report on EIDL loans posted on 6/21/2020: ,https://www.sba.gov/document/report-covid-19-eidl-loans-report-6-21-20
How PEOs Support for small businesses during COVID-19
A PEO provides small businesses with many advantages that they might not otherwise be able to afford. These advantages have become even more important during this international health crisis.
When small business owners’ partner with ,Makai HR they:
- Gain peace of mind that they are complying with all of Hawaii’s labor laws, which is especially important when decisions are being made about how to handle a health crisis.
- Can provide comprehensive health care plans that will give your employees peace of mind about going to the doctor for treatment and testing.
We are also here to support your business if you are working remotely:
- Our cloud-based platform means that your employees can manage their HR needs through a computer, tablet or phone, making it easier for them to work from home.
- Our cloud based HRIS platform means that your HR team can manage HR remotely if they are sick or everyone is working remotely.
Pro tip: this is a good time to encourage all employees to update to Direct Deposit to reduce in person bank transactions and continue timely payroll payments. Do not delay. ,Contact us today to get started!