Loan Approvals Are Improving, But Small Firms May Require Short-Term Financing.

Since the pandemic began, the SBA has provided more than $1 trillion in economic aid. Through COVID relief to help the nation’s small surviving businesses. As of October 17, applications have been received for a Wage Protection Program (PPP) waiver for approximately 70% of total PPP loans. For PPP loans in 2020, around 92% applied for a waiver.

After the PPP ends, small business owners must find other sources of financing. SBA’s disaster relief aid for economic disaster relief is accepting applications through December 31, 2021. As of October 14, more than $280 billion worth of COVID EIDL has been approved. And applications will Still open until December 31, 2021.

Changes to the EIDL COVID Program Policy, which came into effect on September 8, include:

• Increase the maximum credit limit to $2 million
• Use Funding Extensions to include payments and prepayments of any non-state business debt arising at any time (past or future) and federal debt payments
• Extended grace period to 24 months from receipt of all credits
• Simplify the requirements to become part of a subsidiary, namely a company controlled by the owner or 50% more ownership.
• Additional paths for implementing program size standards for companies that accept NAICS codes. Starting with 61, 71, 213, 3121, 72, 315, 448, 451, 481, 487, 511, 485, 512, 515, 532, or 812

One of the most same challenges for entrepreneurs with EIDL financing is the long time for the money to get to the borrower. This is because the SBA has many applications to process. And many regulations must be complied with before releasing funds to a company. Simplify the prerequisites for joining a subsidiary, such as a firm controlled by the owner or a 50 percent stake in the company. The result is that many companies get pre-approval, but sometimes it takes 3-4 months to get the money.