SBA Triples Amount Small Businesses Can Borrow Thru EIDL Disaster Loan Program
Small businesses harmed by the COVID pandemic can soon borrow up to $500,000 through the U.S. Small Business Administration’s emergency lending program.
The SBA is more than tripling the maximum amount small businesses can borrow through its COVID-19 Economic Injury Disaster Loan (EIDL) program.
Beginning April 6, 2021, the SBA is raising the existing loan limit of $150,000 for 6 months of economic injury to a maximum loan amount of up to $500,000 for a period covering 24 months of economic injury.
The SBA is implementing the increase in order to distribute the remaining $270 billion in EIDL funding earmarked for small businesses suffering economic harm due to COVID-19.
The increase is good news for energy marketers who have been frustrated by the low loan cap limit currently allowed under existing SBA regulations.
Unlike Paycheck Protection Program (PPP) loans, EIDL loans must be paid back, but are offered at a below market interest rate over an unusually long repayment period.
The SBA is offering the loans at a 3.75 percent interest rate for small businesses with a 30-year repayment period.
Borrowers who have already received EIDL loans but who qualify for more are not required to request an increase. Instead, the SBA will email eligible borrowers directly with more details as the April 6 implementation date approaches.
The boost in the maximum loan amount came less than a month after the SBA deferred the scheduled start of EIDL monthly repayments until 2022 to give businesses more time to build back.
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.
The SBA has approved $200 billion in EIDL disaster loans to 3.8 million borrowers since the program began last year.
Additional information on the EIDL disaster loan program can be found on the SBA EIDL Program webpage.