Monday, September 19, 2022

Eidl Loan Denied But Advance Approved

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Why Your Application Was Rejected

SBA EIDL Loan Vs Merchant Cash Advance Alternative Up To $5,000,000+ (500+ FICO Approved!)

There are various reasons why you can be denied an SBA loan. However, when your loan application is denied, you should receive an explanation for this decision. If no explanation is given, you should contact the lender with whom your application was processed to get more information. As with any loan, the SBA has a set of requirements that applicants must meet to qualify for a loan. If your business does not meet one of these criteria, the loan can be denied.The list of requirements include:

Sba Targeted Eidl Advance And Supplemental Advance: Is Your Business Eligible

As part of the Economic Injury Disaster Loan program, the Small Business Administration offers two loan advance packages for the hardest hit businesses and private nonprofits, with funds that do not need to be repaid. These advances are similar to a grant, but without the typical requirements that come with a U.S. government grant. Eligible businesses may receive up to $15,000 total in funds $10,000 through the Targeted EIDL Advance and $5,000 through the Supplemental Advance.

To receive an advance, you must first apply for a COVID-19 Economic Injury Disaster Loan*. You do not need to accept the loan or be approved for the loan to receive an advance. Once you apply for the loan, SBA will invite you via email to apply for one of the advance programs if your business is located in a low-income area .

Before you apply, please check the map to ensure you are in a low-income area and review the eligibility criteria below.

*Please do not submit duplicate COVID-19 EIDL applications. If you have already applied or cannot find your invitation email, instructions on how to have your application updated or reevaluated are below (in the section Information for Applicants.

Sba Disaster Loan Alternatives To Consider

You can find traditional and non-traditional loans to get your business out of a precarious situation. However, youll need to do your due diligence to ensure youll be able to pay off any new debt you take on.

Below are the four best disaster-assistance funding options for your business to consider:

  • Business Line of Credit
  • Equipment Financing
  • Recommended Reading: How Much Credit Score Required For Car Loan

    What Happens If My Eidl Loan Is Declined

    If youâre applying for an EIDL loan, you need the fundsâand if your loan gets declined, it can be extremely discouraging.

    EIDL loans are denied for a variety of reasons . But if your loan is declined, youâre not out of options! There are alternative routes you can take to get the financial assistance you need to keep your business moving forward, including:

    How Does Getting Denied For An Eidl Work

    Three top reasons for denial of an EIDL Loan and how to get approved ...

    If you were denied an EIDL loan by the SBA, you should receive a notice in writing with a reason for the denial. You have the right to present information to address the reason for the decline and request reconsideration.

    When you submit a request for reconsideration, you need to provide all the new information that will overcome the SBAâs denial. According to the SBAâs regulations, you must also provide your current business financial statements. .

    You have six months from the notice to request a reconsideration.

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    Why Small Businesses Are Looking For Alternatives To Ppp & Eidl Funding

    Taken together, the PPP and EIDL programs have distributed a massive amount of funding to struggling businesses in the wake of the coronavirus pandemic. However, many businesses have been unable to secure funding from these programs despite applying when directed and meeting all the relevant qualifications. Other businesses, having received funds from these programs, have discovered that the funding they received was far less than the amount for which they applied. Still other businesses either havent met the qualifications or have avoided applying for PPP funds due to the restrictions placed on how the funds must be spent in order for the loan to be forgiven.

    Whatever the reason, there are businesses out there in need of funding that have not been served by the PPP or EIDL programs. Thats why weve set out to highlight other lending options both public and private that are currently available to small businesses.

    When Will The Sba Begin Sending Email Invites To The First Priority Group

    The SBA will begin sending email invites to businesses and nonprofit organizations that received the EIDL Advance in an amount less than $10,000 starting on . It may take several weeks before all emails are sent to businesses in the first priority group so please do not be alarmed if you do not receive your email invite right away. The invite to apply will be sent to the primary contact email address associated with your original EIDL application. All communications from SBA will be sent from an official government email with an @sba.gov ending. Please do not send sensitive information via email to any address that does not end in @sba.gov.

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    How Bench Can Help

    If you need help providing evidence of your economic injury, Bench can ensure your income statement and financial figures are accurate so you can submit a strong reconsideration application. How do we do that? Our historical bookkeeping team will complete your bookkeeping for the months you need to proove your economic injury. Then, we provide financial statements with accurate figures to submit in your reconsideration request. Get started with a free consultation to learn more.

    Eidl Loan And Eidl Grant Summary

    Three top reasons for denial of an EIDL Loan and how to get approved

    In short, we hope all of your pressing questions regarding EIDL loans have been answered above. We have left out a few questions but you can see the full SBA EIDL Loan FAQ here.

    If you are curious about the Targeted EIDL Grant â if you qualify, if so for how much â you can take a look at our EIDL Grant Tracker on our app.

    If you want to apply for a PPP loan, you can consider applying via Bluevine or via Funding Circle or via Credibly. You do not need existing relationships with these lenders.

    Finally, if you want to keep up to date on all of this â and be the first to know about new city, state, and federal grant programs â get a free 15 days here of our Skip Plus.

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    How Do I Request A Reconsideration

    Contact the SBAâs Disaster Assistance Processing and Disbursement Center through email at with your reconsideration request. A good reconsideration request will clearly summarize the SBAâs reason for rejection, explain your reasoning for the reevaluation, and provide supporting documents to strengthen your proposal.

    Be sure to include your EIDL loan application number, the date you applied, your business name, and your contact information. Form 4506T may also be requested. The form gives permission to the SBA to access your tax records directly from the IRS.

    Businesses Can Apply For Eidl Reconsideration Appeals And Increases After December 31st

    The deadline to apply for a first-time EIDL loan is December 31st, but the Covid EIDL program will continue to process applications after the deadline. If you are denied an EIDL loan you have six months from the date of denial to request reconsideration. For example, if you apply for an EIDL loan today and do not hear back until February 10, 2022, you have until August 10, 2022, to apply for reconsideration. Any appeals must be made within 30 days of the date of decline.

    Businesses have two years from the origination date to request an increase, even past this December. If, for example, you are approved for an EIDL loan on December 1, 2021, you have until December 1, 2023, to request an increase. This holds true as long as the SBA has the available funds.

    Currently, the SBA still has close to $100 billion allocated to EIDL funding, but that may quickly dwindle as more businesses apply and request increases. The best option is to request reconsideration or an increase right away, while the SBA has the funds available.

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    What Forms Are Needed For The Loan Application

    The SBA highly recommends using the online loan application, which can be found at .Small businesses will also need the following:

    • Tax Information Authorization for the applicant, principals and affiliates.
    • Complete copies of the most recent Federal Income Tax Return.
    • Monthly sales figures .
    • If you are a sole proprietor, you may need to include SBA Form 5C.

    For those with limited web/online capabilities, paper forms can be found at .

    Disaster Loan Funding Timeline For Your Business

    SBA EIDL loan Denial Doesn

    The COVID-19 pandemic has been an unprecedented economic disaster affecting many industries, small businesses, and workers. EIDL loans, along with the previous PPP loan program, have been the biggest lifelines around for many small businesses. No one wants to hear they have to wait for a life preserver when theyre drowning. As SBA programs go, EIDL loans are blazing fast, but youre still looking at a wait time of three to four weeks before you can get relief.

    Unfortunately, the only part of the process you really have any control over is the application, which you can accelerate by having documents and information handy when youre filling it out. Still, that only accounts for hours, not days.

    Did you miss the EIDL program application window? Check out your other lending options with our list of the best small business loans.

    How has your experience been with the EIDL process? Let us know in the comments.

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    Boy Oh Boy Oh Boy I Tell You

    The SBA cited multiple reasons for denying Bobby McKnight-Harrison’s $9,000 Targeted EIDL Advance application on April 22, including claiming he isn’t an American. The Charlotte property manager and consultant said he previously served as a federal student worker and longtime government contractor.

    “That money can help me pay down some of the bills on the business itself, the utilities, the rent,” he said.

    Through the appeals process, McKnight-Harrison has tried to clear up the confusion on his application, including a minor error he made about his address.

    “No contact back whatsoever,” he said. “To me, it’s frustrating to the point that you don’t want to reach back out to them.”

    Another business owner told WCNC Charlotte the SBA initially denied her for owing child support even though she doesn’t have kids.

    Meanwhile, the SBA initially denied Emily Cordero in early April after the federal agency thought the Concord coffee shop owner didn’t pay her taxes.

    Thankfully, the federal government quickly changed its mind after WCNC Charlotte advocated on her behalf.

    “I honestly feel like this wouldn’t have happened without your help,” Cordero said.

    RELATED: ‘We just can’t explain how grateful and thankful we are’ | Concord small business relieved after getting $7K SBA loan

    Review Your Application And Reapply

    When you get the bad news that your SBA application has been denied, you can fight it if you believe it is unwarranted. On the other hand, you can also review the entire application and make it stronger for re-application. Qualifying for an SBA loan is essentially a numbers game. For instance, various lenders will have specific credit score minimums that you need to meet.

    They may also have a specific amount of collateral that they require. You can view these requirements as being too rigid and a negative aspect of the whole process. Or, you can view them as guidance and a way of making loans predictable. Such outlines can make it easier to strengthen your application and then reapply. Of course, re-application isnt the best option for all business owners. According to SBA guidelines, a borrower must wait 90 days after receiving a denial notice before reapplying for an SBA loan.

    This is because SBA lenders tend to check credit scores using an E-Tran system. This system remains active for 90 days. Its not until these 90 days are up that the credit can change to reflect any changes in your application.

    If you need quicker funding , we recommend finding an alternative to an SBA loan instead. Furthermore, reapplying doesnt suit all situations. For instance, if your business is in a certain industry, it could be difficult to obtain financing.

    • Improve your business and personal credit
    • Wait a few months
    • Improve your business financials

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    How Long Does It Take For Eidl Applications To Be Processed

    One of the big questions borrowers have when applying for a Covid-19 EIDL loan is âhow long will it take for my application to be processed?â

    And, unfortunately, that question doesnât have a one-size-fits-all answer.

    The length of time it takes to process your EIDL application can vary based on application volume, from a few days to a few weeksâbut typically, new applications are processed within 21 days. And If your loan is approved, the SBA will move forward with loan disbursement pretty quickly loan proceeds should hit your bank account within 5 to 10 business days.

    Can You Appeal A Targeted Eidl Grant Decision

    Denied or Still Waiting for EIDL Loan Increase?

    At this moment, the answer, unfortunately, is no.

    As you can see in all the letters above, the SBA is very clear about this. They say if you have questions about this decision you can email them at .

    If you’d like more help, especially when it comes to other programs, grants, and funding, we’re happy to help as well with our premium grants and funding information. If you’ve been denied, you’re not alone, but there are many other programs and resources out there to help small businesses, and you can join the tens of thousands of others getting extra help.

    Read Also: Is Refinancing Car Loan Worth It

    Recording Eidl Loan Payments:

  • Head to the Transactions page. Click Add expense, enter the bank account for the payment with the Account dropdown, select the Date of the payment, and enter the payment amount into the Total amount box. Or, find the imported expense transaction in the bank account, and select it to open the transaction details pane.
  • Below the Category dropdown, click the Split this withdrawal button.
  • In the Category 1 dropdown menu, select Transfer to Bank, Credit Card, or Loan and then select the EIDL loan account. Enter the principal payment amount into the Amount box.
  • In the Category 2 dropdown menu, select Interest Expense, and enter the interest amount into the Amount box.
  • Click Save, and you’re done!
  • Keep in mind that there are no prepayment penalties on an EIDL. If you make an extra principal-only payment, you can skip the “Split this withdrawal” button and categorize the entire amount directly to the EIDL loan account.

    Additional resources:

    Can I Still Apply For A Loan Through The Paycheck Protection Program

    The Paycheck Protection Program is no longer accepting new applications. It had been replenished in December 2020 when the Economic Aid Act was passed, enabling PPP lenders to grant new loans to borrowersâincluding borrowers who already received a PPP loan . The program, however, ended May 31, 2021.

    If you got a PPP loan, and you’re planning to submit a loan forgiveness application, you can start applying the day after your covered period ends and for the 10 months thereafter. For people who applied early on in the program your deadline to apply for forgiveness was some time in mid-July 2021. If you don’t apply in time, you’ll be responsible for monthly interest and principal payments.

    Also Check: How Does Pre Approval For Car Loan Work

    Apply For Eidl Supplemental Grants By December 10th

    The EIDL Supplemental Advance cannot be processed after December 31, 2021 and so applicants should apply by December 10th. In the press release, the SBA stated, “The SBA cannot continue to process Supplemental Targeted Advance applications after December 31 and strongly encourages eligible small businesses to apply by December 10 to ensure adequate processing time.”

    The Targeted EIDL Advance program will continue through December 31, 2021 and will be processed into 2022. The Targeted Advance program has a hard deadline of December 31st, like the EIDL loan, but those that qualify for the grant will still receive it if they applied by December 31, 2021.

    According the most recent EIDL data, just over 800,000 Targeted and Supplemtal Advances have been approved. The Targeted EIDL Advance program awards $10K grant to businesses that live in low-income areas across the county and had a 30% or more loss of revenue over an eight-week period between 2019 and 2020.

    If you believe that you qualify for the Targeted Advance and did not receive an email invite, you can email the SBA at disastercustomerservice@sba.gov or contact customer service at 1-833-853-5638.

    I Don’t Know If It Would Ever Get Resolved

    SBA RESPONDS TO RECONSIDERATION FOR MY EIDL LOAN. STEP BY STEP GUIDE TO ...

    The SBA eventually worked with Thein after WCNC Charlotte alerted the federal agency of its mistake. Not only did the agency approve her $9,000 grant just days ago, but Thein said the SBA also approved an additional supplemental grant of $5,000.

    “It just feels really good to know that it’s over, I’m going to get things paid,” she said.

    Not only is Thein now back in the salon doing what she loves for the people she adores, but the grant money will also breathe new life into her business that cares for people at the end of their lives.

    “I feel so good,” she said. “I feel like a weight has lifted off of me.”

    Thein is not an isolated case.

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