![]() ![]() The agency previously had implemented an 18-month deferment period for loans made during 2021. Payments are deferred for the first two years (during which interest will accrue), and payments of principal and interest are made over the remaining 28 years. Implementation of a deferred payment period: The SBA said small business owners will not have to begin COVID-19 EIDL repayments until two years after loan origination.COVID-19 EIDL funds are now also eligible to prepay commercial debt and make payments on federal business debt. Increasing the COVID-19 EIDL cap from $500,000 to $2 million: Loan proceeds can be used for any normal operating expenses and working capital, including meeting payroll, purchasing equipment, and paying debt.The following key changes were announced. In a news release issued late Thursday afternoon, the SBA said it was implementing the changes to make it easier for the small business communities still reeling from the pandemic, especially hard-hit sectors such as restaurants, gyms, and hotels, to access the more than $150 billion in funding available for loans. Small Business Administration (SBA) announced major modifications to the COVID-19 Economic Injury Disaster Loans (EIDL) program, including raising the loan cap from $500,000 to $2 million and adding business debt payments to the list of ways businesses can use the loan proceeds. As more relief provisions are rolled out by Congress and the states, keep our Coronavirus Resource Center bookmarked for the latest and most timely information. If you have any questions about EIDL or any other Covid-19 relief programs, please do reach out to our Tax Team. To learn more abou t the details, FAQs, and other data available, visit the Covid-19 EIDL page on the SBA website. The application is completed directly with the SBA. The interest charged will be a 2.75% fixed rate for nonprofit organizations and 3.75% for all other businesses. Making prepayments on debt owned by a federal agency or an SBIC.Regularly scheduled payments on federal debt.Pay or pre-pay business non-federal debt incurred at any time (past or future), this includes monthly payments and/or payments of deferred interest.Certain industries such as lending, investment, and gambling are not allowed to participate.Sole proprietorships and independent contractors also qualify.Borrowers need to meet the small business standards in place for these loans. The loan amount is limited to six months of working capital up to the new maximum of $2 million. If you have received a previous loan through PPP, the Restaurant Revitalization Fund (RRF), or the Shuttered Venue Grant (SVOG) you can still benefit from EIDL. After that window passes, all loan sizes will be considered.Īs before, EIDL proceeds cannot be used for the same purpose as a Paycheck Protection Program (PPP) loan. Until October 8th, the SBA has created an exclusive window where they will only focus on approving loans of $500,000 or less. These loans, unlike other forms of relief in place, are not forgivable.EIDL funds can be used to pay and prepay commercial debts and make payments on federal business debt.Collateral is required for loans over $25,000, generally only the personal property of the borrower.Usage of EIDL funds can be for 6 months of working capital, normal operating expenses, and items such as fixed debt payments, utilities, employee benefits, etc.Loan structure is the same as before-30-year term, 2.75-3.75% interest rate, no pre-payment penalties, no personal guarantees unless the loan balance exceeds $200,000.Maximum loan amounts have moved from $500,000 to $2 million.Shutdown, Turnaround & Outage Contract Audits.Recovery Audit & Accounts Payable Audit Services. ![]() Overview of Business Performance Management. ![]()
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