U.S. Small Business Administration Express Bridge Loan (EBL)
The Express Bridge Loan (EBL) Pilot Program can provide expedited direct loans for businesses that have been affected by declared disasters, including COVID-19. The program is a supplement to other existing disaster-related loan options like the Economic Injury Disaster Loan Program. This page provides information about EBL loans in the context of the nationally declared COVID-19 disaster. Below you will find information on the EBL Pilot Program; however, SBA.com® is not able to provide any additional help with EBL loans.
How much can be borrowed?
Up to $25,000 can be borrowed.
What can the funds be used for?
The loan must be used exclusively to support the survival and/or reopening of your small business and will be disbursed to you as working capital.
Who is Eligible for an Express Bridge Loan For COVID-19?
To be eligible, your business must (a) have been in operations as of March 13, 2020, (b) have been adversely impacted by COVID-19, (c) have a pre-existing relationship with a lender that offers EBL loans as of March 13, 2020. You must also have 500 or fewer employees, although this number is higher for certain industries heavily impacted by the COVID-19 pandemic, like the restaurant industry or hospitality industry. Other requirements may apply, so be sure to go over the process in detail with your lender.
Loans must also undergo and underwriting process that looks at the borrower’s FICO Small Business Scoring Service Score, the personal credit score of any guarantor, the IRS tax transcript (or something equivalent) for the borrower, and other items.
What are the loan terms?
The loan terms will vary based on the lender and on your specific situation, but the following will be true.
- The maximum loan amount is $25,000.
- The maximum interest rate your lender can charge is 6.5 + the prime rate. The prime rate is the interest rate that commercial banks charge their most creditworthy customers, generally large corporations. The rates may be variable or fixed.
- Your lender may charge fees, including (a) an application fee up to the greater of $250 and 2% of your loan amount, (b) late payment fees up to 5% of the scheduled loan payment amount, and (c) the reasonable direct costs of liquidation of the loan. No other fees may be charged to a borrower.
- No collateral requirement.
- The maximum term of the loan is 7 years. However, the lender may allow repayment over a longer term if you are not able to obtain longer term disaster funding.
- You may be required to repay the EBL loan in part or in full if you are approved for long-term disaster financing (for example, an EIDL loan).
- Lenders are not required to take collateral for EBL loans, however they have the option to do so. You should check with your lender to see if they will require any collateral.
Requirements
- Loans must be made within six months of March 13, 2020 (September 13, 2020).
- You must be able to demonstrate that you have a need for the credit provided with an EBL loan and you must not have access to other sources of credit. (In other words, you must meet the U.S. Small Business Administrations’s “credit elsewhere” requirements.)
- You must have been in business as of March 13, 2020 and you must be able to demonstrate that you have been adversely impacted by the COVID-19 disaster.
- You can only obtain one EBL loan for each declared disaster. This means you can only obtain one EBL loan for the COVID-19 disaster.
Who can make EBL Loans and how do I apply?
You should talk to your existing banks and lenders to see if they offer EBL loans. This is because you can only get an EBL Loan from a lender that you had a pre-existing relationship with as of March 13, 2020. EBL Loans can be made by U.S. Small Business Administration Express Lenders that have filed the appropriate paperwork with the U.S. Small Business Administration. The lender must be an Express Lender authorized by the Small Business Administration and must also be specifically authorized by the Small Business Administration to make EBL loans.
Where can I learn more?
This program guide offered by the Small Business Administration outlines the EBL Pilot Program in greater detail: https://www.sba.gov/document/support–express-bridge-loan-pilot-program-guide.