Sba Doubles Maximum Loan Amount for Small Businesses

The SBA has made a significant move to help small businesses thrive, doubling the maximum loan amount for eligible borrowers. This change will allow more businesses to access the capital they need to grow and succeed.

The SBA's 7(a) loan program, which offers the most popular type of SBA loan, has seen a major increase in its maximum loan amount. The new maximum is $5 million, up from the previous cap of $3.75 million.

This increase will benefit small businesses that need larger loans to cover expenses such as purchasing new equipment, expanding operations, or hiring more staff.

Intriguing read: Conforming Loan Amount Increase

The SBA has increased economic injury disaster loan limits to $500,000.

The Economic Injury Disaster Loan program provides low-interest loans to small businesses with 500 employees or less and nonprofit organizations to help offset revenue loss due to COVID-19.

Loans can cover up to 24 months of economic injury, with loan amounts up to $500,000.

You might like: Sba Disaster Loan Forgiveness Application

For loans over $25,000, the SBA will continue taking a security interest in business assets.

The SBA will require an unsecured personal guarantee for loans over $200,000 from any individual with 20% or more ownership.

Real estate collateral will not be required for loans of $500,000 or less.

The SBA will automatically review your prior application and email you instructions on how to request an increase to your existing EIDL if you qualify.

The invitation email will be sent to the original email address that you used during the original application process.

The SBA will process increase requests in the order they are received, which may take several weeks due to high volume.

Businesses that did not take a loan yet are also eligible for the $500,000 limit.

The deferment period has increased, with the first payment date for all loans pushed to 2022.

Businesses that applied in 2020 have a 24-month deferment, while new businesses that apply in 2021 will have an 18-month deferment period.

Take a look at this: What Loan Amount Do I Qualify for

The SBA has increased the maximum loan amount for EIDL loans to $500,000.

Loans were previously limited to $150,000, but the new limit allows for up to 24 months of economic injury coverage.

The SBA will automatically review your prior application and email you instructions on how to request an increase to your existing EIDL if you qualify.

The SBA will process increase requests in the order they are received, and it may be several weeks before you receive a response due to the high volume of requests expected.

Businesses that did not take a loan yet are also eligible for the $500,000 loan limit.

The deferment period has increased as well, with the first payment date for all loans pushed to 2022.

A fresh viewpoint: Eidl Loan Forgiveness Application