The relief of the COVID era ends with the small business trapped on a “bad trip” as Omicron soars

A COVID-era recovery loan deadline expired on Friday, and questions remain about how much money is available to support small businesses Crouch down while the Omicron variant soars across the economy.

Small business owners had until Friday to apply for the regular Economic Injury Disaster Loan (EIDL) and the Targeted EIDL Advance program. However, the Small Business Association (SBA) has not clarified how much will remain in these funds.

A representative told Yahoo Finance that the agency would accept applications after Jan.

The SBA has made progress in distributing funds to small businesses across the county after heavy criticism in 2020 when applicants have faced long delays, confusing procedures, and communication errors.

To date, the SBA has issued nearly 4 million loans under the program totaling $ 316.6 billion as of December 23. according to SBA data. The SBA has also funded over 547,000 targeted EIDL advances for approximately $ 4.7 billion.

However, it is unclear how much money is left for all COVID-19 EIDL programs. This week the Business Journal reported that the agency owns $ 11.8 billion remaining, but an SBA spokesman was unable to confirm that figure to Yahoo Finance and declined to provide a specific number.

Millions of business owners have already received their loans and can still apply for an increase two years after the loan was granted. However, these funds could soon be used up. The bipartisan infrastructure law passed by Congress in November would draw approximately $ 31 billion from the COVID EIDL programs.

These cuts would take the form of “cancellations”, a frequently used instrument in federal budget planning. This would make it possible Congress examines the merits of programs and funding levels and could lead to legislators withdrawing unused funds from an agency or program.

The story goes on

These terminations can include: Cut $ 13.5 billion from the EIDL and $ 17. 5 billion from the Targeted EIDL Advance, which offered instant grants of up to $ 10,000 in months to property owners in low-income areas temporarily closed because of the pandemic.

The SBA confirmed that Congress originally provided them with $ 105 billion in total funding for COVID-EIDL programs, including targeted and ancillary advance components. However, it is unclear how the cuts will affect the amount of credit the SBA can provide. Small business owners have been able to apply for EIDL loans in excess of $ 500,000 and use the funds to pay off debt up to $ 2 million.

“The SBA has sufficient funds to support all EIDL applicants up to their full claim amount,” a spokesman told Yahoo Finance in a statement.

“A bad trip”

Even if the COVID-19-EIDL programs expire, the SBA will continue to support established small business owners and startups through their traditional loan portfolio. The agency’s four-year strategic plan, due to be released earlier this year, sees the SBA continue to support the recovery effort.

In the meantime, many small business owners keep waiting for their funding and complaining that they are caught in an endless cycle of red tape and unresponsive officials.

“It was just a bad ride. I don’t understand why it is so difficult to do something so simple. They have everything they need, “Michael Hill, an independent contractor based in Chicago, Illinois, told Yahoo Finance in an interview.

Hill had no problem getting an EIDL for $ 18,000 this July – but he’s now in limbo as he applies for a larger loan.

“I’m really having problems right now. It made my Christmas party totally miserable, ”said Hill as he struggled to pay his bills. The 63-year-old is threatened with the withdrawal of his car, which needs a new engine and, as an Uber driver, is his lifeline because he cannot make the payments.

“There is no reason for that. I will essentially lose my business, ”added an emotional Hill.

In October Hill had applied for an increase in funding of about $ 58,000 through the EIDL, but logistical problems prevented the SBA from verifying his new bank account. Since then, the worker has been caught in a cycle of calls, emails, and document requests – with no relief, even though the SBA has most of his information on file.

In October, GOP representatives Blaine Luetkemeyer and Patrick McHenry sent one Letter to SBA Administrator Isabel Guzman creates the lack of communication and how it hinders small business loan inquiries. It also prompted Senators John Hickenlooper (D, CO) and James Risch (R, ID) to do the bipartisan Streamlining of the EIDL law Improve the EIDL application process for small businesses and fight against fraud.

According to the Idaho Republican, small businesses in his state are struggling to get responses to their EIDL applications from the SBA. The aim of this new legislation is to simplify the process so that small businesses can get responses to their requests quickly and effectively.

Among other measures, the law requires the SBA to submit a report to Congress detailing the steps it has taken to correct its handling of identity theft cases and how it has recovered improper payments.

Still, help could be on the way. By the newly revised Build Back Better Legislation for now sunk in Congress, the SBA could raise billions in funding to bolster existing loans and grants or to create a range of new programs.

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv

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