Why are Small Business Not Applying for the EIDL Loan?
- August 10, 2020
- Posted by: email@example.com
- Category: Uncategorized
Remember, the aspect that made EIDL so attractive to small businesses in the first place is the low interest rates and 12-month deferred repayment plan.. Nonetheless, small businesses should feel free in applying for the EIDL loan at a low-interest rate.
Although SBA has disbursed advances to almost 5 million businesses, it is still not enough to lend a hand to small businesses. Furthermore, SBA states that it cannot approve more grants as the PPP grant money is all spent.
Let’s take a look at why EIDL loan is hard to get, realistic solutions, and what lies ahead for small businesses amidst coronavirus pandemic:— it is actually super easy process to obtain the loan
The Common Issues Associated with EIDL
The most common issues when it comes to EIDL loans are:
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Low Credit Score
Several small business applications had to face rejection due to lower credit. However, the low credit score should not be the criteria, nor was that the intent of congress..
This is part of the PPP grant
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Review Your Denied Appeal for the EIDL Loan Application
If you believe that your disaster loan’s rejection was due to unjustified reasons, you can send a request as a reconsideration to an SBA DAPDC (Disaster Assistance Processing & Disbursement Center. Remember, you have more than six months after the first loan rejection to submit your new appeal. However, make sure you attach all the necessary documentation that highlights your logical reasoning.
Update and Re-Prepare Your Disaster Loan Application
When you submit another application, do not make the mistake of including the same business details as before. Instead, think of it as an opportunity to re-prepare your entire disaster loan application. Therefore, assemble and update your relevant documents and finish the disaster loan application’s prerequisite criteria. Concentrate on the probable reasons that got your application denied in the first place.
Check Your Forecasts Again
Small businesses should make a habit of reviewing their forecasts regularly. In fact, whether or not you are applying for an EIDL loan, forecasts review can help you look for alternative cost-effective solutions. In fact, extensive financial forecasts can help you find more flaws and opportunities that may have been invisible to you before the submission of your first application. In hindsight, conduct regular checks and come up with realistic ways to explain your business situation. The more prepared you are, the better you can handle the uncertainty.
It is not easy to maintain the growth of your small business during the coronavirus pandemic crisis. In fact, chances are your business will have to bear more costs, which means you should review your operational tasks and sales projections.
The idea of the EIDL loan is to facilitate small businesses that want to remain afloat during these unprecedented crises. Fortunately, the SBA still intends to issue more separate coronavirus related disaster recovery loans with less rigid eligibility requirements.
The truth is small businesses can no longer face constant application rejection to acquire EIDL loans. The first initiative SBA should make is to make the application process streamlined for instant access to the funds for more small businesses.
Nevertheless, before you reapply or apply for an EIDL or other SBA loan, ensure your operational and financial documentation is in order. Practically, you should seek the services of a professional tax accountant who can help you maintain and improve the financial health of your small business.