A $20 billion federal initiative to provide emergency funding to small businesses is out of cash.
The EIDL was crafted to provide economic relief from $1,000 to $10,000 to businesses and nonprofits that experienced a temporary loss of revenue during the pandemic. The proceeds could be used to cover working capital and operating expenses, including healthcare benefits, rent, utilities and debt payments.
The SBA said through the program it provided $20 billion in emergency funding to nearly 6 million small businesses that employ nearly 31 million workers, according to the release.
“This program, built from the ground up in less than two weeks, assisted millions of small businesses, including non-profit organizations, sole proprietors and independent contractors, from a wide array of industries and business sectors,” said SBA Administrator Jovita Carranza in the release
Since the money, which had been allocated by Congress, is depleted, the SBA will no longer make EIDL Advances to new applicants.
While the Advance program is not available, the SBA said the loan portion of the regular EIDL program continues to have cash a 3.75 percent interest rate for small businesses and 2.75 percent for nonprofits with a 30-year maturity and a one-year deferment before monthly payments begin. Eligible businesses and nonprofits are encouraged to apply, the SBA said in the release.
In April, the EIDL received more than 3 million applications as the pandemic continued. The EIDL received $10 billion in funds to distribute in the form of $10,000 loans to businesses in need, which would be distributed within three days of applying for a loan. The loans were intended to serve as a holdover until larger ones could come through.
Typically, the program funds recovery from tornadoes or other disasters. But with the pandemic, Congress provided some funds for the program as part of the $2 trillion CARES Act.
During the first week of May, the SBA capped the federal business disaster loan program at $150,000 and limited it to farmers and agriculture businesses.