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The Economic Injury Disaster Loan program for small businesses affected by COVID-19, a key financing option throughout the pandemic, will close on Friday.
The U.S. Small Business Administration said in a statement last week that the agency will continue to accept EIDL applications until Dec. 31 and process those applications into 2022, until funds for the program run out.
The loan program, which saw the maximum loan amount raised from $500,000 to $2 million a few months ago, provides a 30-year loan that does not require repayments to start until 24 months after the loan origination. Loans are made directly through the SBA rather than through a bank or other lender.
Massachusetts small businesses have received about 65,000 COVID-related EIDL loans for $5.79 billion through Dec. 22, according to the SBA. Nationwide, 3.86 million loans had been approved through Dec. 22 for $316.6 billion.
The New England region has received a total of $12.4 billion, with nearly 143,000 loans approved.
Another funding option, the Targeted EIDL Advance, will also end on Friday. The SBA said it would accept applications for advances of up to $10,000 until Dec. 31 and process those requests into the new year. About 10,000 EIDL advances, which are grants that do not need to be repaid, have been approved in Massachusetts for $87.37 million.
Another type of advance – the Supplemental Targeted Advance – cannot be processed after Dec. 31, the SBA said. While applications will still be accepted, the SBA said legal requirements prevent the agency from processing them after Friday. The supplemental advance of up to $5,000 is available to businesses that had already received a targeted advance payment and does not need to be repaid. Massachusetts businesses have received about 8,300 supplemental advances for $41.7 million.
While providing billions of dollars to small businesses, the EIDL program has been a source of fraud throughout the pandemic. The SBA’s inspector general in a Nov. 30 report said a review of COVID-19 EIDL loans and advances from March to November 2020 showed that over $3.1 billion in COVID-19 EIDL loans and $550 million in targeted grants went to potentially ineligible recipients. The report said the SBA had resolved some of the remediation actions that the inspector general had recommended to reduce fraud.
