5 Tips for Financial Wellness with EIDL: Get Low-Interest Rates
If you’re looking to refinance or take out a new loan with low-interest rates for your medical practice, the Economic Injury Disaster Loan (EIDL) may be an option. The EIDL is designed specifically for business owners like you, who are impacted by natural disasters like the coronavirus pandemic. If you’ve been affected by the global pandemic and need financial assistance, then read on!
Here’s what you need to know about the benefits of the EIDL:
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was set up so small businesses could gain access to financial relief amidst the global pandemic. It has two targeted loan packages which are: –
– The Economic Injury Disaster Loan (EIDL) program,
– The Paycheck Protection Program (PPP)
1. What is an Economic Injury Disaster Loan (EIDL) loan?
COVID-19 caught the entire world off guard, and business owners were unprepared for the effects on operations and expenses. As a small business owner of a medical practice, your financial wellness has probably taken a big hit. In response to the pandemic, the COVID-19 EIDL was set up to help with working capital to ensure operating expenses are met. Here are some quick facts about this loan: –
– It is directly from the Small Business Association (SBA) and must be paid back in full.
– It is a fixed-rate, low-interest, long-term loan. The interest rate is fixed at 3.75% for businesses and 2.75% for private nonprofit organizations. The loan term is up to 30 years.
– Has a maximum loan amount of $2 million.
– The first two years of payments are deferred though interest shall accrue.
– Loans below $25,000 have no fees, while those greater than $25,000 have a one-time $100 fee plus costs. Ensure you have collateral if your loan is above $25,000 and a personal guaranty for loans greater than $200,000.
2. Who qualifies for an EIDL loan?
Quick Fact – The COVID-19 EIDL program was initially set to end on December 31st, 2020, but the date was extended to December 31st, 2021, through the Consolidated Appropriations Act (CAA) 2021. This extension is available to previous EIDL applications that are within low-income areas.
New applicants can apply but must first go through an intake process to submit relevant documents. This requires filling in an intake form that confirms eligibility. It is essential to note that this EIDL loan is only accessible to small businesses that the SBA established cannot get credit from other sources.
3. Why would I want to apply for an EIDL loan?
Simple – you need the money, and the terms are incredibly favorable. As a medical practice or physician business, you know how to think quickly and handle an emergency, at least when dealing with human needs. Figures and finances are a whole new challenge that cannot be resolved with a band-aid type so
lution. You need to get to the heart of the challenge, and the EIDL loan enables you to maintain: –
– Working Capital
– Rent Expenses
– Utility Payments, and
– Fixed Debt Payments
If you are concerned about having a loan on the books for the maximum duration of the loan, it is worth noting that you can pay back the loan early with no penalty.
4. What are the benefits of applying for and receiving a new Economic Injury Disaster Loan (EIDL) loans 2021?
Some changes have been made to the COVID EIDL in 2021, which you can take advantage of. These are accessible to you even if you applied for a loan last year. The cap has been increased from $500,000 to $2,000,000, and restrictions on how to spend the loan funds have also been lifted. Now the funds can also be used on purchasing equipment, payroll, and any normal operating expenses.
5. How to apply for an EIDL loan 2021?
Ready to apply for this loan? Click here for the online COVID-19 EIDL application form. Applications need to be received by December 31st, 2021, or before the funds that have been allocated run out. If you are interested in borrowing from this relief fund, act today. If you need some help navigating through the application process, reach out to our team at RCN CPAs. Click here to book a discovery call.
