SBA’s Economic Injury Disaster Loan Program Has Unofficially Imploded

The SBA’s Economic Injury Disaster Loan Program Has Unofficially Imploded With over three million applicants for the Small Business Administration’s (SBA’s) Economic Injury Disaster Loan (EIDL) program desperately seeking help, may now get little to nothing from the federal program that was supposed to deliver emergency relief to small businesses because the ‘well has run dry.’ Business owners who applied for this EIDL program suspect they will not receive much of anything as a result.

The initiative, originally known as the Economic Injury Disaster Loan program, is an expansion of an emergency system run by the SBA. It appears that SBA has converted this to nothing more than an emergency cash advance totaling up to $10,000 called the Economic Injury Disaster Loan Emergency Advance. In order to expedite the approval process, the SBA historically stepped in the gap to help businesses struck by a catastrophe that created an economic hardship for small business owners. This spared the applicants the headache of finding a lender willing to work with them.

Due to the acute nature of the Covid-19 Pandemic, this EIDL program has been overwhelmed with requests for help. Many applicants have waited several weeks for feedback on where their application lies, let alone approval. Some applicants are being told they’ll get a fraction of what they expected.

The program was designed to offer loans of up to $2 million, but many recent applicants stated that the SBA is capping the limits of this particular program to just $15,000 per applicant.

The magnitude of the economic disaster created by forced business shut downs across the United States due to efforts to contain the spread of the Coronavirus, has completely overwhelmed most of the big banks’ underwriting departments.
“To provide some perspective, if every applicant received the maximum $10,000 grant, the available funding would only cover about one million businesses. But more than three million applied for disaster loans since applications began flooding in,” stated an SBA representative, who spoke on condition of anonymity.
There are over 30 million small businesses in the United States, so the obvious question is how is every business owner that needs help going to get it?

"Because so many businesses have applied for funding through these SBA emergency funding programs, the system was overwhelmed, causing delays and reduced loan amounts.

For this reason, Quick Lending Solutions made sure that it’s partner banks could streamline the processing of the Payroll Protection Program (PPP) loan before we began offering it to clients since we knew the EIDL program would be depleted faster than the PPP loan, which was designed more as an employee retention program, the primary objective of the Trump Administration in addressing the current economic chaos” , stated Roger Cruise, President, Quick Lending Solutions.

SBA’s Economic Injury Disaster Loan Program Has Unofficially Imploded

The SBA’s Economic Injury Disaster Loan Program Has Unofficially Imploded With over three million applicants for the Small Business Administration’s (SBA’s) Economic Injury Disaster Loan (EIDL) program desperately seeking help, may now get little to nothing from the federal program that was supposed to deliver emergency relief to small businesses because the ‘well has run dry.’ Business owners who applied for this EIDL program suspect they will not receive much of anything as a result.

The initiative, originally known as the Economic Injury Disaster Loan program, is an expansion of an emergency system run by the SBA. It appears that SBA has converted this to nothing more than an emergency cash advance totaling up to $10,000 called the Economic Injury Disaster Loan Emergency Advance. In order to expedite the approval process, the SBA historically stepped in the gap to help businesses struck by a catastrophe that created an economic hardship for small business owners. This spared the applicants the headache of finding a lender willing to work with them.

Due to the acute nature of the Covid-19 Pandemic, this EIDL program has been overwhelmed with requests for help. Many applicants have waited several weeks for feedback on where their application lies, let alone approval. Some applicants are being told they’ll get a fraction of what they expected.

The program was designed to offer loans of up to $2 million, but many recent applicants stated that the SBA is capping the limits of this particular program to just $15,000 per applicant.

The CARES Act, the $2.2 trillion relief bill signed by President Trump on March 27th, 2020, authorized $349 billion to be allocated to Small Business Administration to help small business owners across the country. Within the revised guidelines, the SBA was to offer the first $10,000 as a grant that didn’t have to be paid back. Those funds were supposed to be available to borrowers within three days of their application, even if they weren’t approved for a loan. Because of overwhelming demand from millions of business owners, that hasn’t happened. The larger part of the small business rescue efforts within the CARES Act is the Paycheck Protection Program (PPP) loan, which started taking applications on April 1st. Applicants to the PPP initiative have faced delays as the big banks were flooded with applicants and not having the ability to deal with a 1,200 percent increase in SBA loan volume in less than 30 days.
The magnitude of the economic disaster created by forced business shut downs across the United States due to efforts to contain the spread of the Coronavirus, has completely overwhelmed most of the big banks’ underwriting departments.
“To provide some perspective, if every applicant received the maximum $10,000 grant, the available funding would only cover about one million businesses. But more than three million applied for disaster loans since applications began flooding in,” stated an SBA representative, who spoke on condition of anonymity.
There are over 30 million small businesses in the United States, so the obvious question is how is every business owner that needs help going to get it?

"Because so many businesses have applied for funding through these SBA emergency funding programs, the system was overwhelmed, causing delays and reduced loan amounts.

For this reason, Quick Lending Solutions made sure that it’s partner banks could streamline the processing of the Payroll Protection Program (PPP) loan before we began offering it to clients since we knew the EIDL program would be depleted faster than the PPP loan, which was designed more as an employee retention program, the primary objective of the Trump Administration in addressing the current economic chaos” , stated Roger Cruise, President, Quick Lending Solutions.