SBA Begins Approving EIDL Loan Increases Over $500K
Today marks the end of the 30-day exclusivity period that the SBA set under the new EIDL regulations. Starting today, the SBA will begin approving qualified applications for EIDL increases over $500K. Meanwhile, tens of thousands of businesses are still waiting for a decision on their initial EIDL applications or are stuck in reconsideration. Here's what you need to know.
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EIDL Approvals Over $500K Start today
At the beginning of September, the SBA instituted a 30-day exclusivity window. The SBA explained that it was prioritizing loan requests below $500K until October 8th. Starting on October 8th, the SBA would begin approving and disbursing loans above $500K. Starting Friday, businesses will begin receiving their loan increase decisions.
In an exclusive interview with Skip, Veronica Pugin, Senior Advisor to the SBA, stated that applicants should not expect a flood of approvals right away on October 8th. The SBA will begin approving applications, but it will take time to work through all of the requests. Ms. Pugin commented that the review process for loans over $500K takes about a month.
EIDL Increases Over $500K Have Already Been Denied
This week, businesses already received denial letters for their EIDL increase requests over $500K. The denial reason for some requests is "lack of repayment ability." The SBA appears to use the information in the five new required documents for loans over $500K, to determine whether or not the applicants will be able to repay the requested loan amount.
When determining the business owner's ability to repay, the SBA also takes into consideration other factors. In a letter listing a "lack of repayment ability" as the denial reason, the SBA wrote, "Our analysis...concluded your income is insufficient to repay a disaster loan in addition to your existing debts, living expenses, taxes, insurance, and other obligations." We will try to obtain more information on how the SBA calculates an ability to repay.
Thousands Of Businesses Are Still Waiting For a Decision
During the interview with Ms. Pugin, she clarified that the SBA no longer has a backlog, which she defined as a pool of loans that are not being processed at all. The SBA has cleared the backlog of applications and has made some progress on every application below $500K. That being said, tens-of-thousands- of businesses are still waiting for their initial decision or increase decision.
According to our recent survey, 49% of businesses are still waiting for a decision on their increase request below $500K or they are in reconsideration. 20% have been denied a loan below $500K and are thus ineligible for a loan over $500K. 3% have already received a denial for an increase of over $500k and only 21% have been approved.
How To Apply For EIDL Reconsideration
If you were denied for an EIDL loan, either above or below $500K, you can still apply for reconsideration. We created a reconsideration template that you can follow when applying for reconsideration. If you need to apply for reconsideration for loans over $500K, you may use our template as a guideline, but you will need to adapt it to your situation.
Before applying for reconsideration, it's important to gather all documentation the SBA is asking for and solve any issues the SBA brings up in their denial. If you are unclear about the denial reason, consider asking your loan officer if they can provide more details. The SBA also recommends reaching out to your local SBA office to find out more about the denial reason.
Get Personalized Help With EIDL
Do you have other questions about EIDL 2.0, including reconsideration, new collateral requirements, or how to get approved? Get ongoing personalized funding help from our team. There are over 3,000 on our waiting list, but you can skip the wait list completely with this invite link, exclusive to our readers.