May 8, 2020—With the constant evolution of government business-lending programs like the Economic Injury Disaster Loan, financial consultants have had to update clients seemingly around the clock to keep them informed of their options.
And, Thursday brought more important news on that front, as the COVID-19 pandemic appears poised to impact the business world at length. The EIDL loan approvals and processes were reportedly updated in a manner that could be rather impactful to business owners like those that operate auto repair facilities.
A report by The Washington Post said the SBA is limiting EIDL disbursements to $150,000 per applicant, due to overwhelming demand. Also of note, as of May 4, the SBA is only taking EIDL applications from agricultural businesses (more information along those lines can be found on the SBA website, by clicking here.)
Key updates on the EIDL include:
- The loan approval amount is system-generated based on a number of factors, noted California-based industry consultant Brad Mewes the founder of COVID19loans.org. Those factors mainly include, but aren't limited to, the following: industry, location, credit worthiness, assets, and ability to repay the loan.
- SBA representatives recommend, Mewes noted, that when business operators receive the email to set up the necessary lending portal, that they take the indicated steps to accept the loan so they can begin processing it, even if the amount is less than they'd like. That will guarantee business operators at least that amount.
Also, the SBA has been experiencing widespread technology issues late this week, and their internal systems have been down sporadically, Mewes adds, causing delays across all platforms.
In recent correspondence with FenderBender, Mewes also offered auto shop operators guidance regarding lending options such as the Paycheck Protection Program (PPP). The industry consultant says recent issues with PPP funding have largely proven the value of business owners working with smaller, local and regional banks to help secure funding.
"The bigger banks have had challenges quickly processing applications," Mewes said recently regarding the PPP, "where the smaller, local banks are making huge efforts for account holders."
Mewes also said the Main Street Lending Program is still another lending option that shop owners should at least keep on their radar and monitor to see if it's a viable option for their business.
"The Main Street Lending Program was designed for larger ... PE-backed companies," Mewes said, "that may have challenges meeting existing loan commitments. However, as we learn more, it could become a viable source of financing for small businesses. We are staying on top of this for our clients."