Businesses still impacted by the pandemic, the SBA’s EIDL loan is still available until December 31, 2021.

What’s even better is that the SBA increased the loan limit up to $2 million for small businesses in September 2021.

The Rules Are Still The Same. 

  • This is a 30-year loan.  No payments for the first 24 months, then the loan is paid back over the remaining 28 years.  The interest rate for business is 3.75% while non-profit businesses enjoy a lower 2.75% interest rate.
  • If the EIDL loan is greater than $25,000, then the business must agree to collateralize the loan with business assets.
  • If the EIDL loan is more than $200,000, then a personal guarantee is also required by owners who have a 20% or more ownership interest.

Businesses Who Receive The EIDL Loan Can Only Use The Funds For The Following Expenses:

  • Pay or pre-pay business non-federal debt incurred at any time (past or future), including monthly payments & payments of deferred interest
  • Pay regularly scheduled payments on federal debt
  • Payroll
  • Rent/mortgage and utilities
  • and Other ordinary business expenses

Immigration Status

Business owners do not have to be US Citizens.  Each business owner with 20% or more ownership must be a US Citizen or qualified alien with a valid Social Security Number.  A green card holder would qualify for the loan.  Immigration visas where the 20% or more owner does not have a green card may or may not qualify, but it wouldn’t hurt to apply for the loan and see what the SBA says.

How Much Can You Borrow?

The SBA is calculating the maximum loan amount by looking at the 2019 Gross Profit from your tax return and multiplying it by two times that amount.  For example, if you sell goods and your sales are $500,000 and COGS are $300,000, your Gross Profit is $200,000.  A such, the SBA should allow you to borrow $400,000 with the EIDL Loan.

Credit Scores.

For loans of $500,000 or less, your personal credit score needs to be at least 570.

For Loans greater than $500,000, your personal credit score needs to be at least 625.

For businesses that began operations partially through 2019 or 2020, SBA will calculate your maximum eligible loan amount.

We at LB&J Certified Public Accountants are helping small businesses obtain these EIDL Loans from the SBA.  If you or anyone you know could take advantage of these loans before the December 31st deadline, please feel free to reach out to us at [email protected] or call our main number at 704-919-1754.

Call LB&J today if you have any questions or would like to see how you can qualify for any of the EIDL Loan program.

Get EIDL Consultation Today!