Businesses will soon be able to borrow up to $ 500,000 in federal loans in the event of an economic disaster | Business

Small businesses and nonprofits will soon be able to borrow larger amounts thanks to the US Small Business Administration’s COVID-19 Economic Disaster Loan Program.

Effective April 6, the SBA increases the loan limit from 6 months of economic harm with a maximum loan amount of $ 150,000 to up to 24 months of economic harm with a maximum loan amount of $ 500,000.

“More than 3.7 million businesses employing more than 20 million people have found financial assistance through SBA Economic Disaster Loans, which provide low-interest emergency working capital for help save their businesses. However, the pandemic has lasted longer than expected and they need larger loans. Many have asked the SBA to remove the cap of $ 150,000, ”said Isabella Casillas Guzman, administrator of the SBA.

Businesses that receive a loan subject to the current limits do not need to submit an increase request at this time. The SBA will contact you directly via email and provide more details on how businesses can request a raise as April 6 approaches. Any new loan application and any outstanding loan when the new loan limits are implemented will automatically count towards loans covering 24 months of injury up to a maximum of $ 500,000.

This new relief builds on the SBA’s previous announcement of March 12, 2021 that the agency is extending deferment periods for all disaster loans, including EIDL COVID-19, until 2022 to give businesses more time to rebuild.

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