On March 24, the U.S. Small Business Administration (SBA) announced additional relief available for businesses impacted by COVID-19.
The Economic Injury Disaster Loan Program (EIDL) was made available to small businesses and non-profit organizations last spring. Due to high demand, loan amounts were capped at $150,000. The loans, which are intended to support certain working capital needs, carry a 3.75% interest rate for businesses or a 2.75% rate for nonprofit organizations and a maturity of up to 30 years.
In its announcement, SBA indicated that effective April 6, the maximum COVID-19 EIDL program loan amount will be increased to $500,000, based on 24 months of economic injury. This change was made due to the pandemic continuing longer than expected, causing many organizations to require additional financial support. Borrowers who previously received funds should not submit a request for an increase; instead, SBA may contact these borrowers regarding their eligibility for an increased loan amount.
This new funding is in addition to the SBA announcement that loans issued through the EIDL program would have an extended deferment period, meaning that borrowers would not be required to make payments until 2022. As interest is accruing through this time, some borrowers may wish to make payments during the deferment period.
To learn more about the COVID-19 EIDL program, please visit sba.gov/disaster and choose the COVID-19 EIDL link. For more information about COVID-19 relief options, contact your HBK Advisor.