September 20, 2021

SBA ups the limit on COVID-19 EIDL loans

The SBA retooled the EIDL program this month, quadrupling the cap on individual loans from $500,000 to $2 million and offering more flexibility in the way businesses can use the funds.

Restaurants and other small businesses now have access to more low-interest federal loan funds to help with pandemic recovery, thanks to a revamped Economic Injury Disaster Loan (EIDL) program.

The U.S. Small Business Administration retooled the EIDL program this month, quadrupling the cap on individual loans from $500,000 to $2 million and offering more flexibility in the way businesses can use the funds. A National Restaurant Association webinar, available to watch on demand, details the changes and provides step-by-step instructions on how to apply.

EIDL is “an important tool in the recovery toolbox for this industry,” notes the Association’s Executive Vice President of Public Affairs Sean Kennedy in the webinar’s opening remarks. That tool just became more powerful.

Businesses that received a previous EIDL loan can request additional funds. The 3.75% business loans are payable over 30 years. “This is very cheap debt that’s stretched over a long time,” says webinar speaker Patrick Kelley, associate administrator of the SBA’s Office of Capital Access.

SBA is authorized to make COVID-19 EIDL loans through Dec. 31, 2021, or when funds are exhausted, whichever occurs first. Restaurateurs are encouraged to apply as soon as possible. Until Oct. 8, the program is limiting loan approvals to $500,000. If you’re requesting that amount or less, apply quicky to take advantage of this exclusivity period. Loans above $500,000 will not be approved before Oct. 8, but you can still apply today.

One tip for those who haven’t received an EIDL loan already: Apply now for up to $500,000, Kelley recommends. As soon as that’s approved—within about three weeks—you can log into the SBA portal and submit a loan modification requesting additional funds.

Here are the program highlights:

EIDL improvements

The revamped EIDL program offers several upgrades, including:

Increased loan amounts. The cap is now $2 million, up from the former limit of $500,000. Businesses that already received an EIDL loan can request additional funds.

Expanded use of funds. Restaurants can now apply EIDL funds to the payment and prepayment of nonfederal debt, including loans and credit cards. This allows you to swap out higher-rate debt with EIDL’s 3.75% rate. The funds can now also be used for regularly-scheduled payments of federal debt. Other uses include payroll, rent/mortgage, utilities and other business expenses.

Deferment of payback. Principal and interest do not need to be paid for the first 24 months. (Existing loans with less than a 24-month deferment will be adjusted.)

Broadened eligibility rules for affiliated businesses. An affiliate is now defined as a business that you control or in which you have 50% or more ownership


To receive EIDL funds, businesses must have been in operation on or before January 31, 2020. The funds cannot be used to expand the business, for startup purposes or for prepayments on loans from a federal agency.

How Do I Apply?

First-time applicants: Complete an online COVID-19 EIDL application.

Businesses applying for an increase: Complete your request for an increase in your COVID-19 EIDL portal.

For more details, view the National Restaurant Association webinar More Flexibility and Funds: New SBA Loan Options for Restaurants and Small Businesses.

Download the Association’s EIDL information brief here