The federal government’s COVID-19 disaster loan program for small businesses and nonprofits ran out of money on Saturday, hours after the deadline for borrowers to request additional loan funds, according to an email notification obtained by Newsday.
The U.S. Small Business Administration, in the message to borrowers, said all funds in its COVID-19 Economic Injury Disaster Loan program “have been exhausted.”
“We are unable to continue processing your application due to the lack of available funding for the COVID-19 EIDL loan program,” reads the message. “SBA is no longer processing COVID-19 EIDL loan increase requests or requests for reconsideration of previously declined loan applications under this program.”
The agency stopped making new loans weeks ago.
Saturday's notification was sent about 13 hours after the 11:59 p.m. Friday deadline set by SBA for existing COVID EIDL borrowers to request more loan funds before the program ends.
The agency did so because some borrowers might be eligible for larger loans than were available in 2020 and early 2021. At that time, SBA, under then-President Donald Trump, reduced the maximum loan amount from $2 million per applicant to $150,000 to ensure the funds weren’t exhausted.
The administration of President Joe Biden restored the larger loans after Congress authorized more COVID EIDL funding.
The deadline also applied to small businesses and nonprofits seeking a review of loan applications that were turned down earlier.
An SBA spokeswoman didn’t respond to requests for comment over the weekend.
COVID EIDL loans come with a term of up to 30 years and an interest rate of 3.75% for businesses and 2.75% for nonprofits.
More than 3.9 million COVID EIDL loans, totaling $378.4 billion, have been made nationwide since the coronavirus struck more than two years ago. In New York State, there are 339,354 loans, totaling $37.6 billion, the second-most in the country after California, according to agency data as of April 28.
In March, SBA gave borrowers up to 30 months of deferment before they have to begin making loan payments. The decision was in response to a request from Sen. Chuck Schumer (D-N.Y.) and supported by 15 other Senate Democrats.
Saturday’s email message said COVID EIDL borrowers will no longer have access to loan documents and other information via the application portal at covid19relief1.sba.gov after May 16.
“The SBA has local offices in your community which can refer you to resources that may be able to assist your business in other ways,” the message reads, adding more information is available at sba.gov/local-assistance.