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Over the past few weeks there have been several legislative updates impacting the Economic Injury Disaster Loan (EIDL) program and the Paycheck Protection Program (PPP) loans. Below is a summary of the most important changes, and we encourage you to call us at 630-953-4900 with any immediate questions.
The U.S. Small Business Administration (SBA) recently announced a major update to the COVID-19 EIDL program. As of the week of April 6, 2021, the maximum loan amount for COVID-19 EIDLs will increase to $500,000.
Under the CARES Act, the EIDL program was expanded to cover eligible businesses experiencing substantial economic injury resulting from the pandemic. The act also relaxed a number of traditional EIDL loan stipulations, making COVID-19 EIDL loans more readily available.
This latest update from the SBA drastically expands both the maximum loan limit and the period of economic injury that they cover. Previously, the limit for COVID-19 EIDL loans was a maximum of $150,000 covering six months of economic injury. As of the week of April 6, 2021, the maximum loan amount will increase to $500,000 and extend to cover up to 24 months of economic injury.
Loan applicants whose loans are already in process at the time of the EIDL expansion will automatically be considered for the new maximum limits. Additionally, current COVID-19 EIDL loan recipients will be able to request a loan increase. Borrowers should visit the SBA website for further guidance.
The U.S. Senate approved the PPP Extension Act of 2021 on March 25 and the bill was sent to President Biden for his signature. This legislation extends the time for borrowers to apply for a PPP loan until May 31, 2021. No additional funding was provided through the legislation, but it extended the time to submit an application for either PPP round 1 or round 2. Borrowers should consult with their bank on the process and procedures in applying for these loans.
If you’d like to further discuss how the legislative changes to the EIDL program and the PPP loans impact you, please contact Cray Kaiser today. We’re here to help!
Please note that this blog is based on tax laws effective in March 2021, and may not contain later amendments. Please contact Cray Kaiser for the most recent information.