SBA triples maximum loan amount for businesses impacted by COVID
The Small Business Association (SBA) announced that starting April 6, small businesses and nonprofits can apply for up to two years of relief with a maximum loan amount of $500,000.
The COVID-19 Economic Injury Disaster Loan (EIDL) program offers businesses 30-year fixed rate loans providing capital for rent, health benefits, utilities and debt payment. However, unlike the Paycheck Protection Program (PPP), these loans are not forgivable.
The EIDL program has been essential for small businesses and non-profit organizations. Over three million loans worth $200 billion have been approved through March 2021. According to CNBC, 80% of loans processed were below $100,000.
Small businesses and qualifying nonprofits can apply for the loans until the end of the year and can continue to apply for funds after the December 31 deadline. The previous maximum loan amount for EIDL was $150,000 for six months.
Certain loans that were or will be approved before April 6 will be eligible for an increase based on the new amounts.
“More than 3.7 million businesses employing more than 20 million people have found financial relief through SBA Economic Disaster Loans, which provide low-interest emergency working capital for help save their businesses. However, the pandemic has lasted longer than expected and they need bigger loans. Many have called on the SBA to remove the $150,000 cap. We are here to help our small businesses and that is why I am proud to more than triple the amount of funding they can access,” SBA Administrator Isabella Casillas Guzman said in a statement.
Businesses looking for increased loan amounts will not have to contact the SBA. Instead, the agency will contact companies by email around the start date with information for those who wish to request a raise. Those who received funding under the old guidelines will have up to two years to apply for an increase.
The Senate is also considering an extension of the PPP program until May 31. The program is currently set to end on March 31.