The Small Business Administration (“SBA”) is increasing the maximum amount small businesses and nonprofits can borrow through its COVID-19 Economic Injury Disaster Loan (“EIDL”) program.
Starting the week of April 6, the SBA is raising the loan limit for the COVID-19 EIDL 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.
Businesses that receive a loan subject to the current limits do not need to submit a request for an increase at this time. 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. 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.
The announcement of the higher loan limits comes less than two weeks after the SBA announced that it was extending deferment periods for all its disaster loans, including the COVID-19 EIDL loans. In a news release issued March 12, the SBA announced extended deferment periods for all of its disaster loans. The deferral details differ depending on the calendar year the disaster loan was made.
- For all SBA disaster loans made in 2020, the first payment due date is 24 months, extended from 12 months, from the date of the note.
- For all SBA disaster loans made in 2021, the first payment due date is 18 months, extended from 12 months, from the date of the note.
The SBA also granted an additional 12-month deferment of principal and interest payments for existing disaster loans approved prior to 2020 that were in regular servicing status as of March 1, 2020.
We will issue additional Alerts as further guidance becomes available. During this crisis, your LMC professional is available if you have questions related to the latest updates on this topic.