Companies affected by the coronavirus pandemic may soon borrow up to $ 500,000 through the Small Business Administration’s emergency lending program, raising a threshold that has frustrated many applicants.
“The pandemic lasted longer than expected,” said Isabella Casillas Guzman, the agency’s administrator, on Wednesday. “We are here to help our small businesses and that is why I am proud to more than triple the amount of funding they can access.”
The move to the Economic Injury Disaster Loan program – known as EIDL and pronounced inactive – will take effect in the week of April 6. Those who have already received loans, but can now qualify for more money, will be contacted and given the opportunity to apply. an increase, the agency said.
The Small Business Administration has approved $ 200 billion in disaster loans for 3.8 million borrowers since the program began last year. Unlike forgivable loans made through the more visible Pay Check Protection Program, disaster loans must be repaid. But they have a low interest rate and a long repayment term.
Typically, the decades-long disaster program borrows up to $ 2 million, and in the early days of the pandemic, the agency gave some applicants up to $ 900,000. But he soon limited loans to $ 150,000 because he feared he would run out of available financing. This limit – about which the agency has not informed borrowers for months – has angered candidates who needed more capital to keep their struggling businesses alive.
The agency has $ 270 billion left to lend through the coronavirus program, James Rivera, head of the agency’s Office for Disaster Assistance, told senators at a hearing on Wednesday.