Much of the federal financial aid for small businesses affected by the pandemic has dried up, but a loan program has increased the amount existing customers can borrow until the money runs out.
The Economic Disaster Loan and Grant, or EIDL, programs administered by the US Small Business Administration officially ended on December 31 last year. But the SBA has raised the limit on loans for existing customers, administrator Isabella Casillas Guzman told the Bangor Daily News on Wednesday.
The previous loan cap was $150,000, but it has been raised to $2 million for eligible small businesses that already have an EIDL loan. No new customers can apply.
“We’ve increased the limit for some of those borrowers who may have contracted lower amounts, but find they need additional support to deal with these additional global pressures,” Guzman said.
The agency has issued $1 billion on nearly 11,000 EIDL loans in Maine, with the average loan nearly $93,000. This average loan amount matches the national average, meaning eligible businesses could each apply for up to $1.9 million more.
The EIDL program, which also included grants, was available alongside the better-known Paycheck Protection Program, or PPP, which ended in May 2021. Some 47,000 Maine small businesses borrowed 3, $3 billion in the forgivable loan program, an average of $68,622 per company. .
Both loans began under the CARES Act of 2020 to help small businesses deal with closures and staffing issues created at the start of the pandemic. EIDL loans are not forgivable and were intended to allow companies to cover six months of operational expenses. The loans have a term of 30 years and bear interest. PPP recipients were required to use the loans primarily to cover payroll for eight weeks and paid no interest if the loan was cancelled.
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