PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

SBE Council Applauds SBA Administrator Guzman’s Move to Lift Arbitrary EIDL Loan Cap

By at 24 March, 2021, 2:14 pm

NEWS

For Immediate Release

Washington, D.C. – Today, the U.S. Small Business Administration (SBA) announced it is increasing the maximum amount that small businesses and non-profit organizations can borrow through the COVID-19 Economic Injury Disaster Loan (EIDL) program from $150,000 to $500,000.  The Small Business & Entrepreneurship Council (SBE Council) has long advocated for lifting the arbitrary $150,000 cap, and praised SBA Administrator Isabella Casillas Guzman for her action on this important matter.

“Today’s action by Administrator Guzman is very important, and will help many small businesses access the capital they need to recover and navigate re-opening and the uncertainties that lie ahead.  The arbitrary cap of $150,000 was both unexpected and unfair to many small businesses during the early days of COVID-19, and small business owners will be pleased by this positive step,” said SBE Council president & CEO Karen Kerrigan.

In June 2020, Kerrigan testified before the House Small Business Committee on “The EIDL Program and the View from Main Street,” where she explained some of the problems with the program’s execution in its early days and urged restoration of the $2 million limit as intended by Congress and stipulated within the CARES Act.  As Kerrigan noted in her congressional testimony, there was great confusion in the small business community about the $150,000 cap when it first surfaced, and whether this was official policy at the SBA.  Moving forward, SBE Council continues to urge Congress and the SBA to lift restrictions from the EIDL’s $10k grant advance, as many low to moderate-income small business owners who operate in middle-income and “wealthy” areas should also be eligible to receive these needed funds.

With regard to how the SBA will reach out to small businesses that may be eligible for an increase above the $150,000 cap, an agency press release noted:

Businesses that receive a loan subject to the current limits do not need to submit a request for an increase at this time.  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.

CONTACT:

Karen Kerrigan, kkerrigan@sbecouncil.org

Ray Keating, rkeating@sbecouncil.org

SBE Council is nonpartisan advocacy, research and education organization dedicated to protecting small business and promoting entrepreneurship. For more than 25 years, SBE Council has worked on and advanced a range of private sector and public policy initiatives to strengthen the ecosystem for strong startup activity and small business growth. Visit www.sbecouncil.org for additional information. Twitter: @SBECouncil

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