Economic Injury Disaster Loans

Transferring EIDL Loans: Leveraging Low-Interest Rates for Business Growth

In 2020 and beyond, the COVID-19 EIDL program assisted small businesses impacted by the pandemic. If you received an SBA EIDL loan and want to sell your business, IBC can help facilitate the loan transfer process.

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The EIDL loan boasts a 3.75% interest rate over 30 years, a highly competitive option. When a business is sold, existing debts are often paid off, creating a clean balance sheet. Due to these favorable terms, many businesses are exploring the possibility of transferring their EIDL to the new owner. If you're selling your business and considering an EIDL transfer, IBC can assist with the application process and provide essential guidance. Schedule a call with us to get started.

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EIDL Loan Transfer: What You Need to Know

January 1st, 2022

new applications stopped being accepted

May 6, 2022

no longer accepting loan increase requests or requests for reconsideration

May 16, 2022

EIDL portal closed

An important recent change is the extended payment deferment, which began in March of this year. The SBA has prolonged the deferment period to 30 months. This means that recipients of EIDL funds now have a 30-month grace period before starting their regular loan repayments, with the entire 30-year loan term to complete payments.(Interest is accruing during this time)

Transferring a business with an existing EIDL loan involves notifying the SBA and may lead to one of three outcomes: (1) the loan must be paid off before the sale, (2) the sale can proceed, but the sale proceeds must clear the loan, or (3) the sale can happen, with the loan transferring to the buyer.
Regarding the third option, if the SBA approves the sale and loan transfer, the buyer must meet SBA loan requirements. Failure to meet these requirements may result in sale disapproval. In such cases, the SBA may require a personal guarantee from the buyer to secure the loan in case the business falters under new ownership.