SBA to Raise Economic Injury Disaster Loan Limit

The Small Business Administration said Wednesday that starting the week of April 6, it will boost the maximum amount that small businesses and non-profit organizations can borrow through its COVID-19 Economic Injury Disaster Loan (EIDL) program.

The loan limit has been raised from six 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.

“The pandemic has lasted longer than expected,” SBA Administrator Isabella Casillas Guzman said in a statement.

Many small businesses and nonprofits, Guzman said, “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.”

Guzman said that 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.

Businesses that receive a loan subject to the current limits do not need to submit a request for an increase at this time, SBA said, adding that it “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, SBA said.

The new relief builds on SBA’s announcement March 12 that the agency would extend deferment periods for all disaster loans, including COVID-19 EIDLs, until 2022.

In order to shift all EIDL payments to 2022, SBA said that it 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 calendar year 2021.