ICBA guide details EIDL lien requirements

ICBA is reminding community bankers about the procedures for renewing or refinancing a line of credit for a borrower with an Economic Injury Disaster Loan.

As detailed in ICBA's guide on SBA lien requirements on EIDLs, EIDL loans over $25,000 require a blanket Universal Commercial Code lien allowing the SBA to take an interest in the assets of the business. The requirements apply to EIDL loans, not advances.

The SBA does not prohibit lenders with a superior lien position to the UCC-1 lien to continue advancing additional funds under existing borrowing arrangements. The guide also provides links to SBA EIDL resources and SBA contact information for borrowers and lenders seeking consent for subordination.

Further, the SBA's FAQs on the EIDL program and agricultural lending notes that the agency places the lien on business and trade equipment, not agricultural commodities, crops, livestock, or the proceeds of their sale in the ordinary course of business. Access ICBA's guide.