SBA raises EIDL loan maximum to $2 million

The Small Business Administration is increasing the COVID economic disaster loan cap from $500,000 to $2 million.

Small businesses that have been impacted by the pandemic will be able to immediately apply for the increased loans, the SBA announced Thursday. The program particularly targets hard-hit sectors of the economy such as restaurants, gyms and hotels that are still struggling to attract the number of customers they served before the pandemic.

The highly transmissible Delta variant of COVID-19 has added new concerns for the economy, and the SBA hopes to offer ways to help businesses still struggling to survive. The expiration of the SBA’s Paycheck Protection Program at the end of May and the Employee Retention Credit at the end of the year make the EIDL program one of the best options for small businesses in Currently, though like the ERC, it also expires on December 31, 2021, unless extended by Congress. Many businesses struggled to get the loans at the start of the pandemic last year, and the program was exploited by fraudsters. But new changes, including a simplified review process and the ability to defer payments and prepay business debt, could make the EIDL program more attractive to small businesses and their accountants.

“The SBA’s COVID Economic Disaster Loan Program provides a lifeline to millions of small businesses still impacted by the pandemic,” SBA Administrator Isabella Casillas Guzman said in a statement. . “We revamped this essential program by increasing the borrowing limit to $2 million, providing 24 months of deferral and expanding flexibility to allow borrowers to repay higher interest commercial debt. We have also stepped up our outreach efforts to ensure that we are connecting with our smaller businesses as well as those in low-income communities who may also be eligible for the COVID EIDL Targeted Advance and Supplemental Advance Complementary Grants totaling of $15,000.

SBA Administrator Isabella Guzman

EIDL funds can be used for all normal operating expenses and working capital, including payroll, equipment purchases and debt repayment.

The SBA also plans to ensure that small business owners will not need to start COVID EIDL repayment until two years after the loan is issued.

To give Main Street businesses more time to access funds, the SBA will offer a 30-day exclusivity window to approve and disburse funds for loans of $500,000 or less. Approval and disbursement of loans over $500,000 will begin after the 30 day period.

COVID EIDL funds will now be eligible to prepay commercial debt and make payments on federal commercial debt. To simplify the COVID EIDL application process for small businesses, the SBA has implemented simpler membership requirements modeled on the Restaurant Revitalization Fund.

Senate Small Business Committee Chairman Ben Cardin, D-Maryland, welcomed the changes to the program. “I am grateful that the Biden administration continues to implement changes to make EIDL more useful to small American businesses,” he said in a statement Thursday. “Dollar for dollar, EIDL is one of the best investments the federal government can make in our nation’s small businesses. This increase will allow small businesses to have access [to] affordable long-term loans to keep their doors open during the pandemic and prepare for the future.

Enhancements to the COVID EIDL program aim to provide businesses with more flexible support from the more than $150 billion in COVID EIDL funds available. The changes will help entrepreneurs access capital at a time when, according to a recent Goldman Sachs 10,000 Small Businesses survey, 44% of small business owners say they have less than three months of cash reserves, and only 31% say they are confident. in access to finance. .

Loans, however, may not be enough to help many struggling small businesses, such as restaurants. “Loans have never been and never will be the solution for neighborhood restaurants and bars,” Erika Polmar, executive director of the Independent Restaurant Coalition, said in a statement. “Restaurant and bar operators have exhausted all of their personal and business savings just trying to keep their business afloat. These small businesses have racked up a year and a half of debt and are now facing consumer hesitation and rising food prices that continue to weigh on their bottom line. Restaurants and bars have notoriously thin margins and stand no chance of recovering from their losses and navigating an uncertain future without debt-free financial relief. That’s why restaurant and bar operators across the country have tailored the Restaurant Revitalization Fund to the unique needs of their businesses. Congress and the Biden administration must prioritize renewing this proven grant program so that the nearly 200,000 businesses left behind in the first round of funding have a chance to survive the pandemic.

Small businesses, nonprofits, and eligible agricultural businesses from all U.S. states and territories can apply for the EIDL program. For more information on eligibility and application requirements, visit The last day for receiving applications is December 31, 2021. For more information on COVID EIDL and other recovery programs, visit

Darcy J. Skinner