Since the start of April, small businesses were given access to more COVID-relief funding to keep them afloat. The U.S. Small Business Administration (SBA), through the COVID-19 Economic Injury Disaster Loan (EIDL) program, has tripled the amount that businesses can borrow. The SBA now allows small companies and non-profits to apply for a loan of up to $500,000.
The SBA has increased the amount that can be borrowed from $150,000 to up to 24-months of economic injury with a maximum loan amount of $500,000. This means the initial amount has been tripled. This increase has come just after the SBA has announced an extension for EIDL repayments. It is also said to be implemented in response to a call for the 150,000 maximum cap to be removed.
According to SBA Administrator Isabella Casillas Guzman, millions of small businesses have benefitted from the EIDL program. And, since the pandemic is ongoing, businesses that require further assistance will now be able to apply for more.
“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 ,” said SBA Administrator Isabella Casillas Guzman.
Businesses that receive a loan subject to the current limits do not need to submit a request for an increase at this time. SBA will reach out directly via email and provide more details about how businesses can request an increase closer to the April 6 implementation date. Any new loan applications and any loans in process when the new loan limits are implemented will automatically be considered for loans covering 24 months of economic injury up to a maximum of $500,000.
This new relief builds on SBA’s previous March 12, 2021 announcement that the agency would extend deferment periods for all disaster loans, including COVID-19 EIDLs, until 2022 to offer more time for businesses to build back. In order to shift all EIDL payments to 2022, SBA will extend the first payment due date for disaster loans made in 2020 to 24-months from the date of the note and to 18-months from the date of the note for all loans made in the calendar year 2021.
If you haven’t already, it’s time to take advantage of this tripled maximum EIDL amount. For assistance with tax filing or applying for EIDL to support your business, feel free to connect with us. At Bookkeeping Confidential, we take care of all your bookkeeping needs with confidentiality and accuracy, and in a timely manner. Connect with us, today.