SBA raises EIDL loan cap to $2 million as delta variant slows recovery

U.S. Small Business Administration administrator Isabella Casillas Guzman announced this week major enhancements to the COVID Economic Injury Disaster Loan (EIDL) program, a federal disaster relief program to help businesses survive the pandemic, especially hard-hit sectors like restaurants, gyms and hotels. 

“The SBA’s COVID Economic Injury Disaster Loan program offers a lifeline to millions of small businesses who are still being impacted by the pandemic,” Guzman said. “We’ve retooled this critical program – increasing the borrowing limit to $2 million, offering 24 months of deferment, and expanding flexibility to allow borrowers to pay down higher-interest business debt."

Key changes

• Increasing the COVID EIDL cap. The SBA will lift the COVID EIDL cap from $500,000 to $2 million. Loan funds can be used for any normal operating expenses and working capital, including payroll, purchasing equipment, and paying debt.

• Implementation of a deferred payment period. The SBA will ensure small business owners will not have to begin COVID EIDL repayment until two years after loan origination so that they can get through the pandemic without having to worry about making ends meet.
• Establishment of a 30-day exclusivity window. To ensure main street businesses have additional time to access these funds, the SBA will implement a 30-day exclusivity window of approving and disbursing funds for loans of $500,000 or less. Approval and disbursement of loans over $500,000 will begin after the 30-day period.
• Expansion of eligible use of funds. COVID EIDL funds will now be eligible to prepay commercial debt and make payments on federal business debt.
• Simplification of affiliation requirements. To ease the COVID EIDL application process for small businesses, the SBA has established more simplified affiliation requirements to model those of the Restaurant Revitalization Fund.

The enhancements to the COVID EIDL program will allow more businesses greater and more flexible support from the over $150 billion in available COVID EIDL funds. Additionally, these 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 report having less than three months of cash reserves, and only 31% reporting confidence in gaining access to funding.

How to apply

Eligible small businesses, nonprofits and agricultural businesses in all U.S. states and territories can apply. Visit sba.gov/eidl to learn more about eligibility and application requirements. The last day that applications may be received is Dec.31, 2021.

The SBA is urging small businesses to file their applications as soon as possible.

Additional information on COVID EIDL and other recovery programs is available at sba.gov/relief or by calling (800) 659-2955 (1-800-877-8339 for the deaf and hard of hearing).