WASHINGTON—A COVID-19 loan program is expanding through the U.S. Small Business Administration starting next week.
SBA is increasing the maximum loan amount from $150,000 to $500,000 under the Economic Injury Disaster Loan program. EIDL also is expanding from six months of economic injury to up to 24 months.
"More than 3.7 million businesses, employing more than 20 million people, have found financial relief through SBA's Economic Injury Disaster Loans, which provide low-interest emergency working capital to help save their businesses," SBA Administrator Isabella Casillas Guzman said in a statement.
"However, the pandemic has lasted longer than expected, and they need larger loans. Many have called on SBA to remove the $150,000 cap," she said.
Businesses receiving a loan under the current $150,000 limit do not need to ask for an increase. The agency will be in contact via email to provide more details. Loans under consideration when the new limits go into place April 6 will automatically be considered for the increases.
The latest changes in EIDL follows a recent decision by SBA to extend deferment for all disaster loans until 2022.
Questions can be directed to [email protected] or 1-800-659-2955. The phone number is 1-800-877-8339 for those who are deaf and hard of hearing.
EIDL program loans have a fixed rate of 3.75 percent for businesses and 2.75 percent for non-profit groups. The term is for 30 years, but there are no prepayment penalties or fees. EIDLs differ from Paycheck Protection Program loans because they must be repaid.