We're still working hard to pass the GYMS Act—targeted federal relief for the health and fitness industry—but these EIDL revisions will help many gyms. So, here's what you need to know about the SBA's EIDL revisions.
The cap on how much you can borrow has increased.
You can now use the funds towards additional expenses (e.g. paying regularly scheduled payments on federal debt and pre-paying commercial debt).
The deferment period of the loan has increased to a full 24 months.
EIDL can be used to pay off higher interest loans.
The affiliation rule has changed, allowing more businesses to be eligible.
Why the EIDL Program Needed Updating
The SBA designed the COVID-19 EIDL program to provide short-term economic relief— through low-interest loans—to small businesses which experienced temporary revenue loss due to the COVID-19 pandemic. However, to prevent exhausting the funds available through the program too quickly, borrowers were only eligible to receive up to $150,000. Thankfully, the initial concern over exhausting funding passed in April 2021, and the SBA increased the cap to $500,000.
This cap on available funds and other issues around the program's application process caused many businesses in the health and fitness industry who needed economic relief to be unable to apply for or receive these loans.
The Small Business Administration recognized the issues that businesses in the fitness industry faced initially with COVID-19 EIDLs. Since then, the SBA has worked directly with IHRSA and owners and operators in the health and fitness industry to adapt the current program to be more accessible so more businesses can get the short-term economic relief they so desperately need.
What Changes Did the SBA Make to the EIDL Program?
The largest change to the EIDL program is the latest cap increase. The maximum loan funds available to borrowers has been expanded to $2,000,000.
The amount borrowers receive is calculated based on the extent of economic hardship which they suffered. However, this new maximum loan amount will allow struggling businesses to get the money they need to keep their doors open.