This week, we expected the SBA to announce "EIDL 2.0", their latest version of the EIDL loan program to help millions of small businesses. This change to the disaster loan program is set to be the biggest change to the program since March, when the EIDL loan limit cap was raised from $150,000 to $500,000. The official announcement has still not come — yet other news on the EIDL program came out this week. Here's a quick recap of the weekly EIDL news including our weekly YouTube videos.
SBA Announced Their Primary EIDL Loan Backlog Was "Cleared"
In somewhat controversial news, the SBA claimed (and this was verified by a source at the SBA) that their main bucket of EIDL loans was cleared on Monday. Loan officers looking to "review" more applications were met with an error message saying that, in short, there were not more available applications to review. This was verified by a screenshot of what the EIDL loan officers see on their portal.
At Least Tens of Thousands of EIDL Applicants Are Still Waiting for Decisions
The controversial part of the above is that based on applicants and YouTube viewers, it's likely tens of thousands of people are still waiting for initial decisions. So how might this be explained?
It's likely that the SBA, for the past month, when they've been referring to the "backlog" and catching up by mid-August — which they did — were referring to the bucket of applications that were at a specific stage in the process: able to be reviewed by loan officers.
However, the SBA EIDL funnel has a handful of steps, one of which is passing automatic reviews as well as awaiting IRS tax transcripts. The latter is where most people have been delayed for months, awaiting IRS tax transcripts.
Survey: Nearly 1/4th of EIDL Applicants Are Still Awaiting Initial Decision
In fact, on Thursday we released a new poll on where people are at with their EIDL loan applications or EIDL loan modifications. Nearly half had said they'd been denied and 1/4th were still awaiting an initial decision
As part of this we reiterated the EIDL reconsideration process, including our EIDL loan reconsideration template. We also shared new information from the SBA on why people are denied for EIDL loans and what to keep in mind for EIDL reconsideration.
When EIDL 2.0 Is Announced, Millions of Small Businesses Will Benefit
According to the SBA webinar screenshots that have previewed "EIDL 2.0" details, the changes will expand eligible uses of EIDL loans as well as raise the EIDL loan limit to $2 million. The former will impact every business that has taken a EIDL loan and the later will likely impact hundreds of thousands of businesses that have hit the $500K limit.
In fact, we put up an EIDL loan increase calculator to help business owners see how much they'd potentially be eligible for with EIDL 2.0.
On PPP Loans, Many Businesses Still Have Not Requested Forgiveness
In other news, the SBA released an in-depth report on their PPP direct forgiveness portal. It was a report that showed the initial success of the program — over 340,000 PPP loans approved for forgiveness in the first 2 weeks — despite many lenders not opting in to direct forgiveness.
One of the other surprising takeaways from the PPP report was that nearly 20% of businesses from PPP draw 1 still haven't requested forgiveness. For PPP draw 2 it's understandable that many businesses haven't request forgiveness yet — some may still be in their covered period, and many lenders aren't ready to process these yet. For last years draws, we hope that for businesses that haven't applied for forgiveness do so soon.
Conclusion: EIDL 2.0 Is Coming and the SBA Continues to Work Through Reconsideration
As always, our team is staying in touch with SBA changes, including EIDL 2.0. In the meantime, we're covering alternative grant and funding opportunities, as well as providing information to help you grow your business. This week we talked about the importance of user reviews in growing your business and building new customer trust, as well as why your business needs a social media presence (with some practical tips).
If you're looking for new ways to get funding for your business, try out our curated funding opportunities. You can try out for free and join tens of thousands of businesses who've found tens of millions in business funding.