Article originally published September 22, 2021
Last updated March 16, 2022

Update: Although new COVID EIDL applications are no longer being accepted, you can still request increases, reconsideration, and appeals until the EIDL funds run out.  You will recall during the first round of EIDL that loans were maxed out at $500,000. Now, you have two years from the original loan date to request additional funds of up to $2 million.

Recently, the Small Business Administration (SBA) expanded its Economic Injury Disaster Loan (EIDL) program to help small businesses access working capital with favorable repayment terms.  Several restauranteurs had applied for the Restaurant Revitalization Grant (RRG) but due to insufficient funding, many did not receive those funds.  The COVID EIDL expansion is an alternate source of capital to restaurant companies to assist in the recovery from the pandemic.

What has changed compared to the original EIDL?

  • Loans can be up to $2 million compared to the original maximum amount of $500,000
  • Use of funds has been expanded to include prepayment of commercial and credit card debt
  • Eligibility rules, including affiliation, are more aligned with those used for the RRG

It is important to remember that the EIDL is not a forgivable loan and must be paid back.  However, the terms are favorable, allowing a low interest rate and 30 years to repay the loan.  In order to qualify, your restaurant must have been in operation as of 2019 and the funds cannot be used to expand the business.

The National Restaurant Association has provided a fact sheet on this updated program which lays out the terms of the program and how to apply whether you are a first-time applicant or looking to increase your existing EIDL amount.

Efforts continue to advocate for the replenishment of the Restaurant Revitalization Fund; however, it does not appear to be a solution for those who need funding now.  If you need an alternate capital source to help pay off high interest loans and reset your financing structure, this COVID-19 EIDL may be the solution you are looking for.  For more information on the COVID EIDL program, visit the SBA’s website by clicking here.

If you have any questions, please reach out to your GBQ representative.


Article written by:
Dustin Minton, CPA, MBA
Director, Assurance & Business Advisory Services

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