Small businesses can get up to $ 2 million in pandemic disaster loans

• The SBA has raised the ceiling on Economic Disaster Lending (EIDL) to $ 2 million.
• Businesses can use funds to cover business expenses such as payroll and rent.
• The SBA will begin approving loans over $ 500,000 on October 8.

The Small Business Administration has raised the COVID-19 loan limit from $ 500,000 to $ 2 million, to help small businesses recover from the COVID-19 pandemic.

Business owners can use Economic Disaster Loan (EIDL) funds for 24-month operating expenses, such as payroll, rent, purchase of equipment and materials, or loan repayments. debts. The funds can now also be used to prepay trade debts and federal trade debts.

Businesses can apply for increased loan amounts immediately, the SBA said on Thursday when announcing the revised limits. However, it will begin approving loans over $ 500,000 on October 8.

Eligible applicants include small businesses with 500 or fewer employees, nonprofits, independent contractors, freelancers / freelancers, and limited types of franchise affiliates that have been in business since January 31, 2020, as per SBA guidelines.

The loan cap comes as coronavirus cases are on the rise again, fueled by the highly transmissible Delta variant. The loans have been a lifeline for many small businesses that have encountered a series of economic hurdles including bottlenecks, labor shortages and supply chain issues.

Applications for the EIDL program and PPP loans are open. Businesses can apply online through the SBA. There is no application fee for loans of $ 25,000 or less. Loans over $ 25,000 require an application fee of $ 100 and guarantees. Loans over $ 500,000 require an application fee of $ 100, in addition to the fees associated with filing a lien on the applicant’s assets. A personal guarantee is also required for loans over $ 200,000.

The loan terms are 3.75% interest for businesses and 2.75% for non-profit organizations, with a maximum term of 30 years. Borrowers will not have to start repaying their loans for two years from their origin.

The SBA is also accepting new applications for EIDL Advance Grants of up to $ 10,000 for businesses with 300 or fewer employees in low-income communities, and which can demonstrate a reduction of more than 30% in revenues.

Applications for EIDL will close on December 31, 2021, unless program funding arrives earlier.