SBA Increases EIDL Loan Limit to $500,000 Starting April 6, 2021
The SBA announced that they are increasing the EIDL Loan Limit to $500,000 from the current EIDL Loan limit of $150,000. This new SBA EIDL Loan amount limit will allow businesses to receive additional financial help during this Covid-19 pandemic.
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The News Release from the SBA on March 24, 2021, read as follows:
“SBA to Increase Lending Limit for COVID-19 Economic Injury Disaster Loans
The U.S. Small Business Administration is increasing the maximum amount small businesses and non-profit organizations can borrow through its COVID-19 Economic Injury Disaster Loan (EIDL) program. Starting the week of April 6, 2021, the SBA is raising the loan limit for the COVID-19 EIDL program from 6-months of economic injury with a maximum loan amount of $150,000 to up to 24-months of economic injury with a maximum loan amount of $500,000.
“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 low-interest emergency working capital to help save their businesses. However, the pandemic has lasted longer than expected, and they need larger loans. Many have called on SBA to remove the $150,000 cap. We are here to help our small businesses and that is why I’m proud to more than triple the amount of funding they can access,” said SBA Administrator Isabella Casillas Guzman.
Businesses that receive a loan subject to the current limits do not need to submit a request for an increase at this time. SBA will reach out directly via email and provide more details about how businesses can request an increase closer to the April 6 implementation date. Any new loan applications and any loans in the process when the new loan limits are implemented will automatically be considered for loans covering 24 months of economic injury up to a maximum of $500,000.
This new relief builds on SBA’s previous March 12, 2021 announcement that the agency would extend deferment periods for all disaster loans, including COVID-19 EIDLs until 2022 to offer more time for businesses to build back. In order to shift all EIDL payments to 2022 to offer more time for businesses to build back. In order to shift all EIDL payments to 2022, SBA will extend the first payment due date for disaster loans made in 2020 to 24- months from the date of the note and to 18-months from the date of the note for all loans made in the calendar year 2021.”
The SBA has just announced that they are increasing the lending limit on the covet 19 SBA EIDL loan from the max was $150,000, now the max is going to be $500,000 that’s what we’re going to talk about in this video.
Hello from Freedom Tax Accounting we’re an accounting firm, where we have been providing quality tax and accounting services now for over 20 years. If you are new to this channel, we provide strategies for small business owners so they can achieve their financial goals. Although for the past couple of months we have been concentrating on providing information on the PPP and EIDL loan programs and any other help that is available for small businesses during this coronavirus pandemic. Now we are recording this video on March 24th and we always emphasize the date on the recording on any video relating to the PPP idol, because these programs are constantly changing so there may be things we discussed in this video that can change as soon as tomorrow. So, that’s the importance of subscribing to our channel that way you’re always up to date with the most current and correct information regarding these loans.
So, what did the SBA announce today? Let me show you. This is hot off the press. This is the latest news release from the SBA where they are basically saying that they are going to “increase the lending limit for coveting 19 economic injury disaster loans”. Okay, what loan is this one? This is the SBA EIDL loan okay. Remember that the loan limit on the EIDL loan used to be $150,000, but now they are going to increase the limit to $500,000 okay. Now according to the SBA, this is starting the week of April 6th. So, people who apply for the EIDL loan starting the week of April 6th, are going to be subject to the new rules.
Now, remember that the EIDL loan program has been extended till the end of 2021. So, if you have not applied for an EIDL loan yet in 2020 or now, I would recommend waiting until the week of April 6 because now you can get more okay. Now obviously the question is what happens to all the small businesses who already applied for the EIDL loan, and they want to increase their EIDL loan based on the new formula. Because the formula in the past was that the SBA gave you six months of economic injury alone, but now they are extending it for 24 months of economic injury funds okay. So, that means that if you got an EIDL alone, even if it wasn’t $150,000, you may now apply for an increase. But the SBA says over here it is, the SBA will reach out directly via email and provide more details about how businesses can request an increase closer to the April 6 implementation date. So, basically, if you already got an EIDL loan, you basically now have to wait for the SBA, because they are going to basically provide further guidance closer to the April 6 date on how it is going to be the method of requesting an increase okay. So, we just wanted to provide this information to you so now we just have to wait until the week of April 6th, to see how small businesses can apply for the EIDL loan increase okay.
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