The U.S. Small Business Administration announced it will be increasing the maximum amount small businesses and nonprofit organizations can borrow through its COVID-19 Economic Injury Disaster Loan program.
Starting April 6, the organization’s loan limit for the program will increase from 6 months of economic injury with a maximum loan amount of $150,000 to up to 24 months of economic injury with a maximum loan amount of $500,000.
“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 in a press release.
Businesses that receive a loan subject to the current limits won’t need to submit a request for an increase at this time, as SBA will reach out directly via email and provide more details on how to request an increase closer to the April 6 implementation date. Those currently going through the process of applying will automatically be considered for the increase.
The latest announcement follows SBA’s March extension of deferment periods for all disaster loans until 2022. 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 2021.
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