In a news release, the SBA said that small businesses and non-profit organizations that received funding from EIDL don't have to start repaying the loan until 30 months after the promissory note date. Interest will continue to accrue on loans during the deferment period. EIDL borrowers can make advance payments on their loans. For PPP loans where the lender's application (“Paycheck Protection Program” loan guarantee form) included an amount for the “Refinancing of an eligible loan for economic damage disasters”, net of the down payment, PPP lenders are instructed to disburse and remit the loan revenues used to refinance an EIDL loan directly to the SBA, not to the borrower PPP.
Instructions are provided on how to electronically submit EIDL refinance payments to the SBA, with a note that on the appropriate form, the EIDL loan number, not the PPP loan number, must be entered in the SBA Loan Number field. The Small Business Administration (SBA) Economic Damage Disaster Loan (EIDL) program offers help to eligible small businesses and nonprofit organizations affected by COVID-19, including charitable organizations such as churches and private universities. On May 6, the SBA was no longer processing requests for an increase in loans from EIDL due to COVID-19 or requests to reconsider previously denied loan applications due to a lack of available funding. Businesses can qualify for these COVID-19 disaster loans regardless of whether they have suffered property damage, and they can use the funds to help cover their working capital needs and cover operating expenses as they recover from the impact of the pandemic.
For more than 2 years, the COVID-19 economic injury disaster loan program provided funding to help small businesses recover from the economic impacts of the COVID-19 pandemic. If the owner of a company wants to sell an equipment or the company itself, the SBA will have to approve the release of their right of retention. Read on for an overview of the EIDL program and how to qualify and submit an application, as well as what you should know when revenues from the Paycheck Protection Program (PPP) must be used to refinance EIDLs. The EIDL program is a loan program with a 30-year maturity term and an interest rate assigned at the close of the loan.
The Notice clarifies that the amount of the EIDL loan to be refinanced does not include the amount of any EIDL advance received by the PPP borrower, since such advances do not need to be repaid.