Federal disaster loans to help small businesses, nonprofits and farms survive the coronavirus pandemic are being increased to a maximum of $500,000 per applicant from the current $150,000, officials said Wednesday. responsible.
The change to the US Small Business Administration’s Economic Disaster Loan, or EIDL, program will take effect April 6, the agency’s new administrator, Isabella Casillas Guzman, said.
Existing borrowers will be contacted by the SBA with information about requesting additional funds, she said.
Nearly a year ago, the SBA quietly reduced the maximum loan amount from $2 million to $150,000 to move the funds forward. As of April 2020, the agency had received more than 5 million EIDL applications within weeks, sources told Newsday at the time.
The maximum loan amount of $150,000 has been criticized by US Senate Democrats, led by Chuck Schumer of New York, because the law establishing EID stipulates the $2 million maximum.
Guzman said Wednesday: “The pandemic has lasted longer than expected and [borrowers] need larger loans. Many have called on the SBA to remove the $150,000 cap. … I am proud to more than triple the amount of funding [that borrowers] can access,” she said.
EIDL loans carry an interest rate of 3.75% for small businesses and farms and 2.75% for nonprofit organizations. The term can be up to 30 years and the loans cannot be canceled.
More information is available at nwsdy.li/bigEIDL.
Appearing before a Senate committee on Wednesday, SBA Disaster Assistance Chief James Rivera said, “We still have over $270 billion in lending authority remaining for the COVID-19 EIDL program. “
He also said the SBA has approved more than 3.7 million EIDL loans for COVID relief, totaling more than $202 billion as of March 18. In New York, the number of loans exceeds 313,000, totaling $18 billion.
“These emergency loans have gone to the smallest businesses, with nearly 90% going to businesses with 10 or fewer employees,” Rivera told the Senate Small Business Committee. “Over the past year, the agency has approved and disbursed three times as many EIDL loans for COVID-19 as we have done in the past 68 years for all disaster loans in all other combined disasters.”
Earlier, the agency announced a postponement of all EIDL reimbursements until next year.
James T. Madore writes about Long Island business news, including the economy, development, and government-business relations. He was previously Albany bureau chief.
