March 31, 2020 | Alabama Small Business Development Center Network Update
Over the weekend, the U.S. Small Business Administration re-launched its online application for the Economic Injury Disaster Loan (EIDL). This new process allows applicants to request a $10,000 advance (forgivable loan) that can be applied toward payroll, rent, and other allowable expenses. The new online application is the only way to access the $10k advance at this time; funds are directly deposited into your account within three days. If you have previously submitted an application, and need the immediate cash injection, SBA recommends that you submit an application through the new Disaster Loan website: https://covid19relief.sba.gov/.
This application process is more streamlined than the initial online application; applying for the advance will not impact the status or slow your existing application.
The CARES Act updated certain parts of the Disaster Loan program:
- Personal guarantees are not required for loans under $200,000 (The previous limit was $25,000.)
- The borrower does not need to show that credit is not available elsewhere
- The $10,000 advance is forgivable even if the applicant is denied for the disaster loan
- Application deadline for EIDL is December 21, 2020
The attached document [click the link] provides an overview of the new Disaster Loan guidelines, and a summary of the new Paycheck Protection Program (PPP) that was created by the CARES Act.
The Alabama SBDC plans to host additional training webinars in the coming days regarding the EIDL and PPP programs. Please note: Lenders will start accepting applications for the PPP loans on FRIDAY [April 3, 2020]. The lenders will then decide if and how they want to participate in this program. Some lenders have implied that they will only accept applications from current customers. This is a fluid and rapidly evolving situation; we will continue to post updates at ASBDC.org and on social media at facebook.com/AlabamaSBDC.