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Requesting an EIDL Loan Increase: What to Know

Requesting an EIDL Loan Increase: What to Know
Susan Guillory
Susan GuilloryUpdated August 31, 2022
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Did you receive one of the EIDL emergency business loans in 2020 or earlier this year but have spent all the money on your business? Perhaps you’re still struggling in this pandemic and you’re looking for more financing. Before you start looking for another small business loan, explore getting an EIDL loan increase.There have been changes to the EIDL loan program this year that may allow you to qualify for an EIDL increase. So if you’re wondering, how do I increase my EIDL loan amount, you’ll find your answers here.

What Is an EIDL Loan? 

The Small Business Administration (SBA) initiated the Economic Injury Disaster Loan program specifically for businesses who were negatively impacted by the COVID-19 pandemic in 2020. As the pandemic has continued, the program has expanded to offer higher amounts to qualifying companies, as well as an EIDL grant that does not have to be repaid. There are requirements about who is eligible for the EIDL program, and there are rules about how EIDL loans can't be used

EIDL Loan Increase

In September 2021, the SBA made changes in how it would calculate EIDL loan amounts for qualifying businesses. Where the maximum you could receive prior was $500,000, it is now up to $2 million. There were other changes made, including the extension of the deferment period to 24 months from origination. Also, EIDL loans can now be used to pay for business loans (including federal debt). So if you received EIDL funds before the increase that happened in September, you may be able to request an increase.

Who Is Eligible to Request an Increase?

You are eligible to request an SBA EIDL increase if you met the initial EIDL loan requirements and received funds either last year or this year. You may be eligible for an increase based on the loan amount you would be eligible for if you applied for an EIDL loan today minus what you received in your initial EIDL loan (including any increases you’ve already received).If you have not received an EIDL loan (nor applied for one), note that you won’t be eligible for the increase. And the deadline for applying for an initial EIDL loan ends on Dec 31, 2021, so if you haven’t yet applied for one, now’s the time.

When Will Requests Be Available? 

EIDL loan increase requests have been available since the September 2021 announcement of the raised cap on loans. You can request an EIDL increase up to your maximum eligible loan amount for up to two years after the origination date of your loan or until funds are gone.

Why Are Some Businesses Eligible for Increases? 

No one expected the coronavirus pandemic to last as long as it has, and many businesses continue to suffer as a result. The SBA, seeing that the financial need wasn’t satisfied, increased funding for the program to ensure that businesses that continued to struggle could find the financing they needed to survive these difficult times.In addition to the loan increase, changes were made to the EIDL Advance program to accommodate smaller businesses located in low-income communities. The Targeted Advance and Supplemental Targeted Advance programs do not have to be repaid.

Requesting an EIDL Loan Increase

If you are eligible for an EIDL increase, the process to request one is fairly simple.

Where to Submit Request 

If you’ve already received an EIDL loan, you should have access to the EIDL portal. This is where you can view your loan information and make payments. You can also request an increase.

How to Prepare for Your Request 

You shouldn’t need to do much legwork to apply for an increase of your EIDL loan, but if your financial situation has greatly worsened since you initially applied, you may need to provide last year’s tax return or other proof of income.

Possible Roadblocks

The SBA has streamlined the EIDL loan increase process, but there are a few things that might keep you from getting yours. First, if you were denied an EIDL loan when you applied, you won’t be eligible for an increase. You do have the option to apply for EIDL reconsideration if you believe you should have qualified for a loan. You may be asked to provide documentation supporting your case. Reconsideration requests will be reviewed even after the Dec 31, 2021deadline for applications. Another roadblock is the fact that some EIDL loans (and increases) require collateral and/or a personal guarantee. If you’re not comfortable providing these, you won’t be able to get the loan increase. Loans over $25,000 require collateral, and loans over $200,000 require a personal guarantee. Also be aware that the EIDL loan increases are only available until funds run out. If you’re considering asking for an increase, it may be beneficial to do so sooner rather than later.

How Long Is the Wait? 

Of course you’re wondering, with the EIDL loan increase, how long does it take to hear back from the SBA? The current EIDL loan increase timeline is several weeks if you’re asking for an increase of under $500,000, and one and a half months if you are asking for more. You can always check EIDL loan status to see where your increase request is. Keep an eye on your email in case the SBA requests additional information from you.

How Is the Loan Disbursed? 

Once your increase request has been processed, the funds will be electronically deposited into your bank account (the same one you used for the first round of funding).

Alternatives to EIDL Loans 

If you aren’t eligible for an EIDL loan or an EIDL loan increase, not to worry. You still have many financing options at your disposal. Look at other SBA loans or term loans from banks if you have great credit. If that’s not the case, there are short-term loans and merchant cash advances you may still qualify for. Also, business credit cards can be helpful if you need to cover expenses. Additionally, there is invoice financing you can use where the value of your outstanding invoices acts as collateral for a loan. And if you’re looking to purchase equipment, there are equipment loans for that purpose.

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Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Photo credit: iStock/erdikocak

About the Author

Susan Guillory

Susan Guillory

Susan Guillory is the president of Egg Marketing, a content marketing firm based in San Diego. She’s written several business books, and has been published on sites including Forbes, AllBusiness, and Cision. She enjoys writing about business and personal credit, financial strategies, loans, and credit cards. Follow her on Twitter @eggmarketing.
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