SBA increases maximum disaster loan amount to $ 500,000, effective April 6

Federal disaster loans to help small businesses, nonprofits and farms survive the coronavirus pandemic are increased to a maximum of $ 500,000 per applicant from the current $ 150,000, officials said on Wednesday. responsible.

The change to the US Small Business Administration’s Economic Disaster Lending Program, or EIDL, is effective April 6, said the agency’s new administrator, Isabella Casillas Guzman.

Existing borrowers will be contacted by the SBA with information on the request for additional funds, she said.

Almost a year ago, the SBA quietly reduced the maximum loan amount from $ 2 million to $ 150,000 to put the funds further. As of April 2020, the agency had received more than 5 million EIDL requests in a matter of weeks, sources told Newsday at the time.

The maximum loan amount of $ 150,000 has been criticized by Democrats in the US Senate, led by Chuck Schumer of New York, because the law establishing the EID stipulates the maximum of $ 2 million.

Guzman said on Wednesday: “The pandemic has lasted longer than expected and [borrowers] need bigger loans. Many have called on the SBA to remove the $ 150,000 cap. … I am proud of more than tripling the amount of funding [that borrowers] can access, ”she said.

EIDL loans have an interest rate of 3.75% for small businesses and farms and 2.75% for nonprofits. The term can be up to 30 years and the loans cannot be canceled.

More information is available at nwsdy.li/bigEIDL.

Before a Senate committee on Wednesday, SBA disaster assistance chief James Rivera said: “We still have over $ 270 billion in loan authorization remaining for the EIDL COVID-19 program.” .

He also said that the SBA had approved more than 3.7 million EIDL loans for COVID relief, for a total of more than $ 202 billion as of March 18. In New York, the number of loans exceeds 313,000, for a total of $ 18 billion.

“These emergency loans have gone to smaller businesses, with almost 90% going to businesses with 10 or fewer employees,” Rivera told the Senate Small Business Committee. “In the past year, the agency has approved and disbursed three times as many EIDL loans for COVID-19 than we have in the past 68 years for all disaster loans in all others. combined disasters. “

Earlier, the agency announced a postponement of all reimbursements from EIDL until next year.

Source link