March 30, 2021
Dear Clients, Colleagues and Friends,
On March 24, 2021, the U.S. Small Business Administration (SBA) announced that it 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.
Businesses that received a loan subject to the current limits do not need to submit a request for an increase at this time. 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. Any new loan applications and any loans in 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.
The SBA also announced that it 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, SBA will extend the first payment due date for disaster loans made in 2020 to 24-months from the date of the note and 18-months from the date of the note for all loans made in the calendar year 2021.
Lastly, on March 25, 2021, the U.S. Senate passed the PPP Extension Act of 2021. The bill is headed to President Biden’s desk and is expected to be signed into law. The bill will extend the PPP Loan application deadline from March 31, 2021 to May 31, 2021. Business advocacy groups and PPP borrowers had advocated for this extension due to the numerous delays that have plagued the PPP program since it reopened earlier this year.
If you have any questions or need further information, please contact your Presti & Naegele professional directly, or dial 212-736-0055 for immediate assistance.
Presti & Naegele