Small businesses and nonprofits can borrow more through the U.S. Small Business Administration’s COVID-19 Economic Injury Disaster Loan program beginning April 6.
The SBA is raising the loan limit for the COVID-19 EIDL program from six months of economic injury with a maximum loan amount of $150,000 to up to 24 months of economic injury with a maximum loan of $500,000.
An EIDL is a low interest loan—3.75% for small businesses, 2.75% for nonprofits—with terms up to 30 years and the first payment deferred for one year.
Businesses that receive a loan subject to current limits don’t need to submit a request for an increase as the SBA will email recipients closer to the April 6 implementation date with details about requesting an increase.
Any new applications and any loans being processed when the new limits take effect will automatically be considered for loans covering 24 months of economic injury up to the maximum $500,000.
The announcement comes just after the SBA notified small businesses that it was allowing more time to pay back loans they got from the EIDL program.
“More than 3.7 million businesses employing more than 20 million people have found financial relief through SBA’s Economic Injury Disaster Loans, which provide working capital to help save their businesses,” SAB Administrator Isabella Casillas Guzman said in a statement.
But with the disaster lasting longer than expected, many small businesses realized they needed larger loans and called on the SBA to expand the $150,000 cap.
“We are here to help our small businesses and that’s why I’m proud to more than triple the amount of funding they can access,” she said.