Friday, we had an exclusive discussion with an SBA loan officer who shed light on the current state of the Economic Injury Disaster Loan (EIDL) program. Businesses can rest assured that the SBA still has plenty of money, as over $100 billion remains in the EIDL pool. Here's what else you need to know about the current state of the EIDL program.
$284 Billion in EIDL Loans Have Been Approved To Date
As of October 21, 2021, the SBA has approved 3.8 million EIDL loan applications for a total of $283.8 billion. It has also approved just over 807K Targeted and Supplemental EIDL advances for a total of $5.6 billion. There was some concern that the SBA would run out of money (like with the Restaurant Revitalization Fund and other programs) before the EIDL application deadline. The SBA loan officer we spoke to stated that the SBA still has over $100 billion allocated to the EIDL program.
The deadline to apply for the EIDL program is 11:59 p.m. on December 31, 2021.
The deadline to apply for the Targeted Supplemental Advance is 11:59 p. m. on December 10, 2021. This is also the deadline to apply for an increase if you have already applied for an initial loan. The SBA will process every application received by that time. If your application is subsequently denied, you are still able to apply for reconsideration as long as your initial application was received by December 31st.
IRS Has Cleared The Tax Transcript Backlog But Many Are Still Waiting For A Decision
The IRS has reportedly cleared the backlog of tax transcripts. Currently, when you submit the 4506-T form and the SBA requests your tax transcript from the IRS, the SBA receives them within five to ten days. This is great news for the businesses whose EIDL application has been held up by their tax transcript.
Meanwhile, according to a recent survey that we conducted, 77% of respondents are still in reconsideration or are waiting for a decision on their EIDL increase. One of the main sources of this is the delay in tax transcripts. Now that the IRS backlog has been cleared and has hastened their response time to the SBA, businesses should be receiving their decisions.
Applications Above $500K Can Take 45 Days to Be Disbursed
Businesses that apply for an EIDL loan above $500K and have business real estate as collateral, can expect to wait about 45 days for their funds to be disbursed. That means that it can up to 55 days from the time of approval for the funds to hit your bank account. For businesses that do not have business real estate as collateral, it can take an additional 2-3 weeks.
When SBA loan officers review applications, they sometimes use a cash flow analysis to determine if the applicant will be able to repay the loan. They use the information from your 2019 taxes to make their determination. If your 2019 revenue was below normal, you can request your loan officer to use 2018 or 2017 tax information to make their determination. If you ask your loan officer to use your 2017 taxes, you will need to submit an additional 4506-T, but not for 2018.
Apply For Reconsideration If You Were Denied
If you were denied for an EIDL loan or increase, either above or below $500K, you can still apply for reconsideration. Some can request reconsideration on their EIDL portal, but it appears not everyone can. If you cannot, you can use the reconsideration template that we created and adapt it to your situation.
Before applying for reconsideration, ask your loan officer if they can provide more detail on the reason for the denial. Be sure to address those reasons in your reconsideration letter. Perhaps you too may qualify based on your 2018 or 2017 business cash flow analysis. You can also reach out to your local SBA office to find out more about the denial reason.
Get Personalized Help With EIDL
Do you have other EIDL questions, including reconsideration, new collateral requirements, or how to get approved? Get ongoing personalized funding help from our team. There are over 4,500 on our waiting list, but you can skip the wait list completely and join now!
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This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Made assumes no liability for actions taken in reliance upon the information contained herein.