The Small Business Association (SBA) announced that beginning April 6, small businesses and non-profits 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 payments. However, unlike the Paycheck Protection Program (PPP), these loans are not forgivable.
The EIDL program has been paramount to small businesses and non-profits. More than three million loans worth $200 billion have been approved through March 2021. According to CNBC, 80% of the loans processed have been for less than $100,000
Eligible small businesses and non-profits can apply for the loans through the end of the year and may continue to request funds after the Dec. 31 deadline. The previous maximum loan amount for the EIDL the as $150,000 for six months.
Some loans that have been 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’s Economic Injury Disaster Loans, which provide low-interest emergency working capital to help save their businesses. However, the pandemic has lasted longer than expected, and they need larger loans. Many have called on SBA to remove the $150,000 cap. We are here to help our small businesses and that is why I’m proud to more than triple the amount of funding they can access ,” SBA Administrator Isabella Casillas Guzman said in a release.
Businesses looking for an increase in the loan amounts will not have to contact the SBA. Instead the agency will reach out to businesses via email around the start date with information for those who want to request an increase. Those who have received funding under the old guidelines will have up to two years to request an increase.
The Senate is also considering an extension of the PPP Program through May 31. The program is currently slated to close March 31.