There is help still available for local small businesses struggling during the ongoing pandemic.
Mississippi Secretary of State Michael Watson said Tuesday the U.S. SBA recently made “significant improvements” to the Economic Injury Disaster Loan (EIDL) program, as it seeks to loan out $150 billion in available funding.
“The SBA is implementing key changes in hopes to make it easier for small businesses to recover from the economic hit from the pandemic,” said Watson.
Among the changes includes quadrupling the COVID-19 EIDL loan limit from $500,000 to $2,000,000. They have also expended the use of proceeds where small businesses can now use the funds on a much greater range of items.
Loan proceeds can be used for normal operating expenses, including payroll, rent (or mortgage payments), utilities, and other operating expenses, as well as for purchasing equipment, paying debt, and working capital. Under these new terms, loan proceeds can be used to make debt payments, including monthly installments, deferred interest, and prepayment on business debt, whether the loan was incurred before or after submitting an SBA loan application. Previously, funds could only be used for working capital needed to sustain the business until it could resume normal operations.
There is also now a longer deferred payment period. Under the revised program, loan repayments will not begin until two years after loan origination. Debt payments are deferred for the first two years, during which time interest will accrue, with payments of principal and interest made over the remaining 28-year loan term. The loan can be prepaid at any time without penalty.
Watson said local small businesses can apply at sba.gov. For more information, contact 1-800-659-2955.