Facing overwhelming demand from struggling businesses, the Small Business Administration (SBA) appears to have significantly limited the size of loans issued while blocking nearly all new applicants from accessing the assistance.
The Economic Injury Disaster Loan (EIDL) is a longstanding SBA program that pre-dates the COVID-19 pandemic and is separate from the popular Paycheck Protection Program (PPP), which is run by private banks and authorized by the SBA. Through the CARES Act, struggling small businesses with fewer than 500 employees were able to apply for an emergency EIDL advance of up to $10,000 within three days of applying that would not have to be repaid.
Staring at a backlog of millions of new EIDL applications, on May 4, the SBA announced it would limit new EIDL loans to agricultural businesses only. Now, after initially telling businesses they could access up to $2 million through EIDL, the SBA has quietly imposed a $150,000 limit, according to the Washington Post.
Congress allocated more than $50 billion in new funding for the EIDL program in recent COVID relief packages. It’s unclear how many EIDL loans have been processed by the SBA since the coronavirus began spreading in the U.S. SBA officials did not comment on the Post article but posted a statement on the SBA site stating, “At this time, only agricultural business applications will be accepted due to limitations in funding availability and the unprecedented submission of applications already received.”