The U.S. Small Business Administration announced March 24 that it is increasing the maximum small businesses and nonprofit organizations can borrow through its COVID-19 Economic Injury Disaster Loan program.
Starting the week of April 6, the SBA is raising the time limit for the program from six to twenty-four months of economic injury and the maximum loan amount from $150,000 to $500,000. Any COVID-19 EIDL loans in process when the new loan limits go into effect will automatically be considered for the new maximum limits, the SBA said.
“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,” SBA Administrator Isabella Casillas Guzman said in a news release. “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.”
The SBA has approved more than $200 billion in COVID-19 EIDL loans. The loans have a 30-year maturity with interest rates of 3.75% for small businesses, including sole proprietors and independent contractors, and 2.75% for not-for-profits.
The announcement of the higher loan limits came less than two weeks after the SBA announced March 12 that it was extending deferment periods for all its disaster loans, including the COVID-19 EIDL loans. Due to the new deferment periods COVID-19 EIDL recipients won’t have to start making payments on their loans until 2022. Borrowers who wish to continue to making payments during the deferment as interest will continue to accrue on the outstanding loan balance.