A small business administration loan, or SBA loan, is a government backed loan that is administered through your local community bank or credit union. It supports local business and entrepreneurs.
The SBA 504 loan program has reached its lending cap of $7.5 billion. The SBA will continue accepting, processing, and decisioning loan applications and communicating those decisions . However, the SBA will not be able to issue a loan number and authorization until funding authority is reset on October 1, 2021, unless Congress acts sooner to address this temporary pause. Fiscal year 2020-2021 has been a record-setting year for the SBA 504 loan program.
The United States Small Business Administration is expected to lift the cap on its Economic Injury Disaster Loans (EIDL) sometime after Labor Day. The cap was set at $500,000 in March 2021, after the SBA spent several months approving only loans of up to $150,000. Traditionally, the EIDL loan program–which has a 30-year maturity date–has a $2 million cap and loan interest terms that range from 2.75 % for nonprofits to 3.75 % for businesses. The amount for which you qualify now is based on your 2019 total revenue minus your cost of goods sold, less any EIDL already received. Additionally, it is expected that the SBA will widen the eligible expenses that may be paid for with an EIDL. Borrowers may be able to use the money to pay off any commercial debt, including credit cards and government-backed debt. Previously, using the proceeds to pay off commercial debt was off limits, and refinancing is not permitted.