Schneider Downs continues to track the evolving landscape of federal financial programs offered in the wake of the business disruption caused by the COVID-19 pandemic. The U.S. Small Business Administration (“SBA”) is more than tripling the maximum amount that small businesses and nonprofit organizations can borrow under the COVID-19 Economic Injury Disaster Loan (“EIDL”) program.
Starting the week of April 6, 2021, the loan limit will increase from six months of economic injury and a maximum loan amount of $150,000 to 24 months of economic injury and a maximum loan amount of $500,000.
Any COVID-19 EIDL applications in process as of April 6 will be considered for the new maximum limits. Businesses that already received a smaller EIDL will not need to resubmit a request for increase. The SBA will provide updated instructions on how to request a loan increase on its website and will reach out directly to existing COVID-19 EIDL borrowers.
COVID-19 EIDLs have a 30-year maturity with interest rates of 3.75% for small business and 2.75% for nonprofits.
This announcement of increased loan limits follows the SBA’s March 12 announcement that it was extending deferment periods for COVID-19 EIDLs. For COVID-19 EIDLs made in 2020, the first payment due date is 24 months, extended from 12 months, from the date of the loan. For loans made in 2021, payments would start 18 months, extended from 12 months, after the loan is made.
For more information on COVID-19 EIDLs, visit the SBA website at: https://www.sba.gov/funding-programs/loans/covid-19-relief-options/covid-19-economic-injury-disaster-loan#section-header-5
If you need more information or assistance with COVID-19 EIDLs or Paycheck Protection Program (“PPP”) loans, visit our website at www.schneiderdowns.com/ppp, reach out to any of your contacts at Schneider Downs or contact Joel Rosenthal at [email protected].
