Companies affected by the coronavirus pandemic will soon be able to borrow up to $ 500,000 under the Small Business Administration’s Emergency Loan Program.
“The pandemic has lasted longer than expected,” said Isabella Casillas Guzman, the agency’s administrator, on Wednesday. “We’re here to help our small businesses and that’s why I’m proud to more than triple the amount of funding they can access.”
The change to the economic catastrophe credit program – known as EIDL and pronounced as Idle – will take effect the week of April 6th. Those who have already received credit but may now qualify for more money will be contacted and given the opportunity to apply for a raise, the agency said.
The Small Business Administration has approved $ 200 billion in catastrophe loans to 3.8 million borrowers since the program began last year. Unlike the forgivable loans granted under the larger and more well-known salary protection program, the disaster loans must be repaid. However, they have a low interest rate and a long repayment period.
Typically, the decade-old disaster program lends up to $ 2 million, and in the early days of the pandemic, the agency gave up to $ 900,000 to some applicants. But it soon limited loans to $ 150,000 because it feared it would run out of funds. That limit – which the agency didn’t tell borrowers about for months – disgruntled applicants who needed more capital to keep their troubled ventures alive.
The agency still has $ 270 billion available for the pandemic relief program, James Rivera, director of the agency’s Office of Disaster Assistance, told senators at a hearing Wednesday.