ICBA is seeking clarity from the SBA on its treatment of Economic Injury Disaster Loans.

The SBA requires collateral on EIDL loans over $25,000 and takes a blanket lien on borrower assets. It also imposes restrictive covenants prohibiting sale or transfer of the collateral, or securing financing with superior liens, without SBA’s consent.

ICBA is asking SBA to resolve this situation, which hinders borrowers’ ability to draw down or renew bank operating loans or to obtain a loan to replace or purchase new equipment—normal bank credit needed to operate their businesses.