Good Morning
Good Morning

Cap raised to $2 million on COVID-19 disaster loans for small firms

"Small businesses across the country continue to need

"Small businesses across the country continue to need financial relief to get to the other side of this crisis," SBA administrator Isabella Casillas Guzman said late last month. Credit: AP/Bill O'Leary

Small businesses, nonprofits and farms can now receive up to $2 million in federal disaster loans, or four times the limit set in spring, officials said.

The U.S. Small Business Administration, citing an increase in COVID-19 cases due to the delta variant, has raised the cap on its Economic Injury Disaster Loans, or EIDL. The loans, which are funded by the federal treasury, had been limited to $500,000 per applicant.

Besides the higher EIDL maximum, SBA has made the loans available to more restaurants because a program for them, the Restaurant Revitalization Fund grants, ran out of money in weeks. Restaurants, along with gyms and hotels, are among the hardest-hit industries.


  • The maximum amount of federal COVID disaster loans for small businesses is now $2 million, up from $500,000.
  • More restaurants are eligible for Economic Injury Disaster Loans, or EIDL.
  • Borrowers have up to two years before starting to repay the loan, though interest accrues during the deferment period.

"With the delta variant, the struggle is far from over," SBA administrator Isabella Casillas Guzman said late last month in an open letter to EIDL applicants. "Small businesses across the country continue to need financial relief to get to the other side of this crisis."

On Wednesday, SBA officials said borrowers who received EIDLs under a lower cap may be eligible for additional funds. However, the Dec. 31 deadline for SBA to receive applications is unchanged.

"Billions [of dollars] are still available," said Matt Coleman, a spokesman for the agency's Region II, which includes New York State.

SBA has made 3.8 million loans since the pandemic struck in spring 2020, totaling $270.5 billion as of the end of last month, agency data shows. New York State has the third most loans after California and Florida: 325,425 loans totaling $25.8 billion. Data for Long Island wasn't immediately available.

The new loan limit brings the EIDL program back into compliance with federal law.

In spring 2020, SBA under then-President Donald Trump, quietly reduced the loan cap to $150,000 from $2 million due to fears the program would run out of money, Newsday reported at the time. Senate Democrats, led by Charles Schumer (D-N.Y.), accused SBA of lawbreaking. In April, President Joe Biden raised the EIDL limit to $500,000.

The loans come with an interest rate of 3.75% for small businesses and farms and 2.75% for nonprofits. The term is up to 30 years and repayment may be deferred for two years, though interest will accrue during the deferment period, the SBA spokesman said on Wednesday.

Applicants must have 500 or fewer employees in most instances. Information about how to apply can be found at

Republicans criticized the higher EIDL limit, citing an October 2020 report from SBA’s Office of Inspector General that found fraud was "rampant" in the program under the Trump administration.

"Dating back to October 2020, it was reported that $78.1 billion of American taxpayer dollars were potentially subject to massive amounts of waste, fraud and abuse within the EIDL program, and still the SBA has refused to do anything to safeguard this program," Rep. Blaine Luetkemeyer of Missouri, the top Republican on the House Small Business Committee, said last month.

Guzman, the agency’s administrator appointed by Biden, said, "SBA has increased fraud controls and is working in collaboration with the SBA Inspector General to closely monitor the program," which she acknowledged wasn’t the case last year.

As much as 35% of the $225 billion in pandemic-related EIDL disaster loans and grants approved between April 2020 and June may be fraudulent, according to a Newsday analysis of SBA data.

More news