Have a story idea
Have a story idea? Send it to us here.
Source : Pxhere.
March 24, 2021
Author : Patty Rodriguez
The Small Business Administration (SBA) announced an increase on Wednesday to the maximum amount a small business or non-profit can borrow through the pandemic assistance program.
“Starting the week of April 6, 2021, the SBA is raising the loan limit for the COVID-19 EIDL program 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,” the press release says.
The program has been used by upwards of 3.7 million businesses with 20 or more employees. It works by giving low-interest emergency loans aimed at keeping struggling businesses from closing.
Citing widespread pressure to have the loan cap increased, the SBA notes “the pandemic has lasted longer than expected, and [businesses] need larger loans. Many have called on SBA to remove the $150,000 cap.”
SBA Administrator Isabel Guzman notes that the new cap is triple the funding the loan program provided to individual businesses in the past.
Importantly, businesses that have already gotten $150,000 do not need to reach out to the SBA to get the remaining funds under the new limit. The SBA “will reach out directly via email and provide more details about how businesses can request an increase closer to the April 6 implementation date.”
New loan applications and pending applications will “automatically” be considered for the maximum $500,000, the SBA says.
Earlier this month, the SBA announced that it would extend deferment periods for EIDL loans until 2022 “to offer more time for businesses to build back.”
“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 the calendar year 2021,” the SBA says.
Senator Jacky Rosen (D-NV) took to Twitter to announce her pleasure over the increase and commend Guzman for "heeding our call," but said there is more to be done. "We still must do more to get additional EIDL funding to small businesses, including lifting the loan cap to the full $2 million and lifting the cap on grants."
The move was also praised by the Small Business and Entrepreneurship Council. “Today’s action by Administrator Guzman is very important, and will help many small businesses access the capital they need to recover and navigate re-opening and the uncertainties that lie ahead. The arbitrary cap of $150,000 was both unexpected and unfair to many small businesses during the early days of COVID-19, and small business owners will be pleased by this positive step,” SBE Council president & CEO Karen Kerrigan said.
Photo via Pxhere.