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.
The SBA, starting the week of April 6, is raising the loan limit for the program 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.
“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. “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.”
According to the SBA, businesses that received a loan subject to the current limits do not need to submit a request for an increase at this time. 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 loans in process when the new loan limits are implemented, the SBA added, will automatically be considered for the increased lending limit.
This new relief builds on the SBA’s March 12 announcement that the agency would extend deferment periods for all disaster loans until 2022 to offer more time for businesses to build back, according to the SBA. In order to shift all COVID-19 Economic Injury Disaster Loan payments to 2022, the 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.
For more information about the SBA COVID-19 Economic Injury Disaster Loan program and disaster loan payments, email DisasterCustomerService@sba.gov or call 1-800-659-2955 (1-800-877-8339 for those who are deaf or hard of hearing).