SBA announces it will triple disaster loan amount limit effective today
The Small Business Administration (SBA) has announced it will increase the amount of loans small-sized businesses can get in COVID-19 Economic Disaster Disaster (EIDL) loans beginning on Monday, April 6.
The move comes following the call of US senator to Colorado John Hickenlooper. The Trump administration unintentionally set the previous limit far below the maximum limit of $ 2 million permitted by lenders in my neighborhood, and Hickenlooper last month demanded the new administration to permit small-sized companies to borrow the maximum amount allowed by the program.
SBA is expected for a tripling of loan amounts for businesses hurt by Covid
From April 6 onwards Small businesses and non-profits are eligible for up to 24 months of financial relief, with a maximum amount of $500,000, according to the Small Business Administration announced Wednesday.
The prior limit for these companies was six months with a maximum loan of $150,000. “More than 3.7 million companies with greater than 20 million workers have found financial relief via the economic Injury Disaster Loans, which provide emergency working capital at low interest to help them save their businesses,” SBA Administrator Isabella Casillas Guzman stated in an announcement. “However the epidemic has been more severe than was expected and requires bigger loans.”
Prior to that there was a limit to prior to the change, SBA limit for COVID-19 EIDL loans was set by six months’ economic loss as well as the maximum amount allowed for loans of $150,000. “I am delighted with the fact that the SBA has listened to our request to increase the limit on loan amounts to cover the possibility of a economic catastrophe, which would have upset small-scale businesses that needed loans larger that were not permitted,” Hickenlooper said. “While the increase is certainly a great improvement but the SBA should consider raising the limit even higher – to $2 million in loans, according to the current law.”
In addition the SBA has also announced that it will notify small businesses who were granted loans under the lower cap directly and provide instructions on how to request an increase in the amount of their loan. Loans made to new customers will automatically contribute to the new limit. Hickenlooper is himself was a small-business owner in the past is on the US Senate Committee on Small Business and Entrepreneurship that is responsible for the SBA.
Knowing the details of A.B.A.’s Economic Injury Disaster Loans (EIDL) program for COVID-19
The Small Business Administration’s (SBA’s) Economic Injury Disaster Loan (EIDL) program provides relief to small-sized businesses as well as nonprofits affected by COVID-19. This includes charities like religious institutions and private schools. The loans were previously limited up to $150,000 SBA released in the middle of March in 2021 that it would increase the maximum loan amount of $500,000 starting on April 6.
The limit was raised in September of 2021. the amount was raised by $2 million. This change is part of a series of policy revisions that took effective Sept. 8. The update also included new permissible uses for the loan funds as well as extended timeframe for deferment and much more. SBA stated that it would start approval of loans that exceed $500,000 from October. 8th, 2021.
SBA has stated that the last date for applications to be considered is December. 31st 2021 (or the time that funds expire the funds are exhausted, whichever occurs first) So interested companies should submit their applications as soon as they can to allow enough time to process and approve.
Businesses are eligible for COVID-19 catastrophe loans, regardless of the extent to which they’ve sustained damages to their property, and they can utilize the funds to meet the needs for working capital and operating expenses while they recuperate from the effects of the pandemic.