Much of the federal financial help for small businesses hurt by the pandemic has dried up, but one loan program has increased the amount existing clients can borrow until the money runs out.
The Economic Injury Disaster Loan, or EIDL, loan and grant programs administered by the U.S. Small Business Administration ended officially on Dec. 31 of last year. But the SBA has increased the cap on loans for existing customers, Administrator Isabella Casillas Guzman told the Bangor Daily News on Wednesday.
The previous cap on the loans was $150,000, but that has been raised to $2 million for qualifying small businesses that already have an EIDL loan. No new clients can apply.
“We’ve increased the limit for some of those borrowers who maybe went in at lower amounts but are finding they need additional support to weather through these additional global pressures,” Guzman said.
The agency gave $1 billion over almost 11,000 EIDL loans in Maine, with the average loan of nearly $93,000. That average loan size matches the national average, meaning qualifying businesses each could potentially apply for up to $1.9 million more.
The EIDL program, which also included grants, was available concurrently with the better-known Paycheck Protection Program, or PPP, which ended in May 2021. Some 47,000 Maine small businesses borrowed $3.3 billion from the forgivable loan program, an average of $68,622 per business.
Both loans began under the CARES Act of 2020 to help small businesses contend with closures and staffing problems created during the early part of the pandemic. The EIDL loans are not forgivable, and were intended to allow businesses to cover six months of operational expenses. The loans run for 30 years and carry an interest charge. PPP recipients were to use the loans primarily to cover payroll for eight weeks, and paid no interest if the loan was forgiven.