Beginning the week of April 6, the SBA started offering a maximum loan amount of $500,000 through its COVID-19 Economic Injury Disaster Loan (EIDL) program. This is a significant increase from the previously available maximum loan amount of $150,000, an amount put into place due to the demand on the program at the height of the pandemic.

In March, the SBA announced that new applicants for the EIDL program would automatically be considered for the new amount. The changes also include modifications to the calculated six-month economic injury, prolonging it to 24 months. The EIDL program typically allows up to $2 million in loans, with loans being capped at $150,000 to help with the pandemic before this latest announcement. The interest rate is 3.75% for businesses and 2.75% for non-profit organizations.

The SBA also has extended deferment periods for EIDL loans and Paycheck Protection Program (PPP) loans until 2022. For loans disbursed in 2020, this means the SBA will postpone payment of the principal and interest to two years from the loan’s origination date. For loans issued in 2021, payment will be due 18 months after the origination date.

As a result of recently passed legislation, EIDL advances have no impact on PPP forgiveness; this is welcome news for small businesses facing hardship due to the pandemic and are looking for much-needed loans to allow them to continue with their operations.

The Internal Revenue Service has made these non-taxable in light of the pandemic, according to IRS notice 2021-06. Typical tax-deductible business expenses are still deductible for the 2020 tax year, even if paid with EIDL loans.

Companies that wish to request a loan increase should:

  • Send an email to CovidEIDLIncreaseRequests@sba.gov.
  • Use the subject line “EIDL Increase Request for [insert your 10-digit application number]”.
  • Be sure to include in the body of your email identifying information for your current loan, including application number, loan number, business name, business address, business owner name(s), and phone number.
  • Do not include any financial documents or tax records with your initial request. SBA will send a follow-up email notification if it needs additional documents.

Due to the high volume of incoming requests, SBA reports it may be several weeks before a response is received from the agency on the next steps to follow. Those who request a loan increase should not resend multiple requests if they do not hear back right away from the SBA, as the extra emails could slow down the overall response time.

Questions about SBA COVID-19 EIDL and disaster loan payments can be emailed to DisasterCustomerService@sba.gov or directed to SBA’s Customer Service Center at 1-800-659-2955.