EIDL Loan Decisions Highlight Variability Among SBA Loan Officers

eidl Oct 13, 2021

It's been almost a week since the SBA began approving and disbursing EIDL loans above $500K. Some applicants have been approved with only mediocre credit and no business real estate, while others with excellent credit and property as collateral have been denied. This shows some variability among loan officers decision-making, but reconsideration is also a viable path if denied. Here is the latest on EIDL loan increases and EIDL reconsideration timing.

Variability Among Loan Officers Leads To Differing EIDL Decisions

Last week, even before the 30-day exclusivity period ended, businesses were receiving denial letters for their EIDL increase requests over $500K, despite previously being approved for the amount they requested. The denial reason for some requests is "lack of repayment ability." The email from the SBA explained, "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."

Meanwhile, other applicants are being approved for the full amount despite having mediocre credit and no business collateral. One business owner who was approved for the full $2 million EIDL loan stated that banks would not even consider lending to him. Mediocre credit and a lack of business collateral was preventing him from securing bank loans, yet he was approved for the EIDL loan.

For this particular business owner, he was approved because of his business revenue and profitability. We are still trying to find out more about how the SBA exactly determines the final approval amount since there's a great deal of variability in their decisions.

If You Were Denied An EIDL Loan or Loan Increase, Apply For Reconsideration

If you were denied for an EIDL loan, either above or below $500K, you can still apply for reconsideration. You can use the reconsideration template that we created for loans below $500K. If you need to apply for reconsideration for loans over $500K, adapt it to your situation. Some are receiving direction from the SBA to apply for reconsideration directly on their EIDL portal, but it appears that not everyone has this option yet.

Before applying for reconsideration, ask your loan officer if they can provide more detail on the reason for denial, so you can address those denial reasons in your reconsideration letter. Perhaps you too may qualify based on your business cash flow and profitability. You can also reach out to your local SBA office to find out more about the denial reason.

EIDL Reconsideration Can Take Several Weeks, Or Longer

According to the SBA, the average reconsideration wait time is four weeks but can take up to six weeks. Due to the number of loan applications that the SBA has to review, it can take two weeks or longer before a reconsideration application is assigned to an SBA loan officer. After it is assigned to a loan officer, it can take an additional two to three weeks for the loan officer to review your application and come to a conclusion. Thus, in total it can take about six weeks.

However, many business owners have been in reconsideration for months, making it difficult to exactly pinpoint how long reconsideration can take. The important part is to apply for reconsideration as quickly as possible.

Get Personalized Help With EIDL

Do you have other EIDL questions, including reconsideration, new collateral requirements, or how to get approved? Get ongoing personalized funding help from our team. There are over 4,000 on our waiting list, but you can skip the wait list completely with this invite link.

Also, by joining Skip Premium, you will gain access to our new business dashboard which has an EIDL progress tracker, EIDL community approval data that displays in real-time the current approval breakdown of our users, your overall funding progress, business tips, and more. Join Skip Premium today and get 1-1 EIDL support.

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