SBA Issues New EIDL Guidance

When the pandemic started many Atlanta businesses were significantly impacted by the various government orders designed to prevent virus transmission. Many were simply not allowed to open while others had to shift to remote work formats or modify service delivery. The resulting financial issues were significant. Fortunately, the Small Business Administration (SBA) initiated several federal COVID-19 relief programs to help. Now that the pandemic has passed almost all these programs are no longer available. In fact, the recently enacted Infrastructure Investment and Jobs Act called for an early end to the Employee Retention Credit. The only remaining program is the Economic Injury Disaster Loan (EIDL) which is set to expire at year-end. Earlier today, the SBA announced new guidance to help small businesses that are considering applying for a new loan, targeted advance, or supplemental advance. To help clients, prospects, and others, Wilson Lewis has provided a summary of the key details below.

New Guidance Highlights

• EIDL Application Acceptance – Applications for a new EIDL or targeted advance will be accepted through December 31^st. However, processing will continue until the funding allocated by Congress is exhausted. This means businesses should not assume a loan will not be originated simply because the application deadline has passed. It is expected the SBA will provide updates to financial institutions when funds are exhausted.
• Maximum Loan Amounts – Existing borrowers are permitted to increase the maximum eligible loan amount for up to two years after the origination date. However, it is important to note maximum increases will not be granted once funds have been exhausted. For this reason, it is important to review financial needs and submit any increased requests as soon as practical.
• Supplemental Targeted Advanced Applications – While applications will be accepted through year-end, the SBA may not be able to process those submitted near the deadline due to legal considerations. In addition, applications submitted after December 31, 2021, will also not be processed. Therefore, the guidance encourages eligible small businesses to apply no later than December 10^th to ensure adequate processing time. This directive means Atlanta companies considering a supplemental advance should quickly determine the need and submit the application shortly to avoid issues.
• Appeal Requests – It was also confirmed that reconsideration and appeal requests for EIDL applications will be reviewed if received by December 31, 2021, and within current timeframe regulations. In other words, six months from the date of decline for reconsiderations and 30 days from the date of reconsideration decline for appeals. It is important to note that all appeal requests will not be reviewed once funds are exhausted.

Fraud Prevention

The guidance also outlined important information applicants and current borrowers should be aware of to protect against potential fraud including:

• In the event an applicant is contacted by someone promising to secure SBA loan approval but requires payment upfront or offers a high-interest bridge loan in the interim, it is likely to be fraudulent.
• The SBA limited the fees brokers can charge a borrower to 3% of loans for $50,000 or less, and 2% for larger loans up to $1M. Attempts to charge more than these established amounts are improper.
• Many phishing attempts use the SBA logo to create an email that appears to be official. To be certain it is coming from a reputable source check to ensure the email ends with @sba.gov and cross-reference information received with that available on the SBA website.

Contact Us

The guidance issued by the SBA highlights the importance of submitting applications and other requests well before the year-end deadline. Atlanta and Georgia companies that wait until the “last minute” are likely to experience significant delays, or worse, lose eligibility because of fund exhaustion. If you have questions about the information outlined above or need assistance with an EIDL or other accounting issue, Wilson Lewis can help. For additional information call 770-476-1004 or click here to contact us. We look forward to speaking with you soon.