The Small and Medium Business Administration said on Thursday that the Delta version of COVID-19 will continue to expand its business nationwide, so that more SMEs will have access to financial support from the government in a disaster loan program. Announced improvements.
First, the SBA has raised the loan limit for its Economic Injury and Disaster Loan Program (a low-interest loan that repays in 30 years) from $ 500,000 to $ 2 million. The funds can be used for all operating expenses, such as purchasing equipment and paying debts.
The SBA has also postponed loan repayments for two years after it began repayment to give small business owners more time to “overcome the pandemic without worrying about achieving their goals,” SBA said Thursday. Said in a statement.
The SBA will only approve and pay for loans of $ 500,000 or less for 30 days, giving SMEs access to relief funds.
The SBA is also streamlining the application, approval, and payment processes to provide more assistance to businesses. Eligible companies can apply for a loan from the SBA website until December 31, 2021. Paycheck protection program loan recipients can also apply for EIDL funding.
Today, the SBA processes more than 37,000 applications per day, up from about 2,000 the day before the pandemic. According to the government, lender productivity has increased from 1.86 applications per day to 15 applications per day. The SBA states that it has cleared the application blacklog and is processing new applications immediately.
“SBA’s COVID Economic Injury and Disaster Loan Program provides a lifeline for millions of SMEs affected by the pandemic, “ SBA administrator Isabel Casillas Gusman said in a statement Thursday. “We have reworked this important program. We have raised our borrowing limit to $ 2 million, offered a 24-month postponement, and increased flexibility to allow borrowers to repay higher-interest business debt. . “
The SBA’s goal is to ensure that all entrepreneurs in need have the capital they need to reopen, recover and rebuild, ”Guzman added. ..
Difficult to access capital
Small business owners who are still struggling to access capital say they are grateful for the initiative.
44% of small business ownersAccording to a Goldman Sachs report, only 31% of small business owners are confident that they will have access to capital when needed. Black owners are getting worse, according to a survey of more than 1,100 small businesses. More than 50% of black-owned SMEs have less than three months of cash on hand, and only 20% of black-owned SMEs are very confident in their access to capital. I am reporting.
“By updating and expanding the COVID-19 Economic Injury and Disaster Loan (EIDL) program, we were encouraged and reassured to see the Byden administration prioritize access to SME capital. “Goldman Sachs 10,000 SME Voice Chair Jessica Johnson Corp. said. Owner of the National Leadership Council and Johnson Security Bureau in Bronx, NY. “”This gives small business owners like me access to affordable working capital as they continue to face ongoing challenges on their recovery path. “
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