The Small Business Administration known as the SBA has decided to extend the repayment deadline for their EIDL loans. The EIDL loan stands for Economic Injury Disaster. Small businesses and most private nonprofit organizations located in a declared disaster area, and which have suffered substantial economic injury with less than 500 employees may be eligible for this loan. SBA can provide up to $2 million to help meet financial obligations and operating expenses that could have been met had the disaster not occurred. The loan amount will be based on your actual economic injury and your company’s financial needs, regardless of whether the business suffered any property damage.
The loan was originally a 1-year period for 2020 loans, but news has just broke out that it has now been increased to 24 months for 2020 loans and 18 months for 2021 loans. For instance, if you were a business funded in July 2020 you now have until July of 2022 to start making those payments. If you were funded back in April of 2021 you now have until October of 2022 to start making payments. This is the perfect news for all of our amazing small businesses in the area giving them less weight on their shoulders to focus on their financial standing before having to think too urgently about paying off their loans anytime soon and the SBA believes this extension will give small business an extra boost of relief allowing them a little more time to figure out their current situation to ultimately keep all of our small business alive and growing!
Small businesses are the lifeblood of the U.S. economy: they create two-thirds of net new jobs and drive U.S. innovation and competitiveness. A new report shows that they account for 44 percent of U.S. economic activity and Florida seems to be very aware of that and know its importance on the economy. Small businesses across the area are going to substantially benefit from the extra time allowing them to get back on their own two feet. Lets not forget that small businesses were hit the hardest during the pandemic due to the lack of exposure to a consistent cash flow which is normally much more necessary for our fellow smaller companies. They simply do not have the availability to cash sitting in the bank as a safety reserve like many of the larger companies can rely on as small businesses face a declining cash flow from falling consumer demand.
All business have costs and with the recent state of our economy due to the COVID-19 pandemic it is no surprise to see these business are struggling the most. A study by Florida’s Small Business Development Center found 54 percent of Florida small business owners feel the pandemic has had a largely negative effect on their business compared to a near 20 percent drop in its comparison with larger companies.
Small businesses are major drivers in the U.S. economy, spurring local job creation and innovation while also fostering entrepreneurship among women, minorities, and other portions of the population. Nationally, small businesses account for 48 percent of all American jobs and contribute 43.5 percent of U.S. Gross Domestic Product. Even though these businesses are considered the “backbone of the economy,” small businesses have faced an economic and existential crisis during the COVID-19 pandemic. Similar to the national level, small businesses play a pivotal role in Florida’s economy. Across the state, there are 2.7 million small businesses, accounting for 99.8 percent of all Florida businesses we can clearly see the detrimental impact the economy could potentially take without the help of organizations such as the SBA. Regardless of the challenges that small businesses presently face, they remain crucial to Florida’s long-term economic recovery.
We all hope to see our favorite small business thriving in the future and ultimately help Florida to continue its rise back to a secure economy, and the new EIDL extension is the perfect news and step forward for all small businesses involved and become a important consideration for future discussions and decisions surrounding economic growth and development on the central Florida area.