BALTIMORE — U.S. Senate Committee on Small Business & Entrepreneurship Chair Ben Cardin (D-Md.) today issued a statement after the U.S. Small Business Administration (SBA) announced that it has raised the maximum amount of loans issued by the Economic Injury Disaster Loan Program (EIDL) to $2 million—the maximum amount allowed by statute. SBA also announced additional enhancements to better serve and support small businesses, especially those in hard hit sectors, such as restaurants, gyms, and hotels.
“I am grateful that the Biden Administration continues to implement changes to make EIDL more useful to American small businesses,” Cardin said. “Dollar for dollar, EIDL is one of the best investments the federal government can make in our nation’s small businesses. This increase will give small businesses access long-term, affordable loans to keep their doors open during the pandemic and prepare for the future.”
In addition to raising the cap on EIDL loans, SBA also announced the following changes:
- 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 announcement follows previous actions by the Biden Administration to make EIDL more useful to struggling small businesses. In April 2021, SBA increased the maximum loan amount from the $150,000 limit set by the Trump Administration to $500,000; and changed the loan calculation formula to provide up to 24 months of working capital—a substantial increase on the Trump Administration’s limit of 6 months of working capital.
Cardin has been pushing SBA to increase the maximum EIDL loan amount to the statutory $2 million since the Trump Administration announced the change last year.
In May 2020, Cardin, Senator Jeanne Shaheen (D-N.H.) and Majority Leader Chuck Schumer (D-N.Y.) sent a letter to then-SBA Administrator Jovita Carranza calling on her to reverse the policy, writing, “This unauthorized policy change will leave the estimated four million pending EIDL applicants in limbo after expecting that SBA would process their loans in a timely manner for the amount permitted under the law.”
Following the Senate Republicans’ and the Trump Administration’s efforts to underfund EIDL in April 2020, Cardin pushed to provide additional funding to the program.