The Small Business Administration has reopened its Economic Injury Disaster Loan program to all small businesses, the agency announced Monday.
The reopening comes more than a month after the SBA quietly closed the program to new applicants, except for agriculture-related companies. The closure, first reported by The Washington Post, sparked a backlash from business groups and lawmakers. The agency at the time had also reportedly lowered the total loan amount available to a small business from $2 million to $150,000.
It is unclear if SBA has lifted the cap as part of the program's revival. We have reached out to the agency and will update this story if we hear back.
The program's return comes after a June 9 letter from a bipartisan group of House members detailed issues with the original EIDL program. The lawmakers said they were disappointed in the closure and called on the agency to both reopen the loan program and lift the lending cap. They expressed concerns that the program lacked transparency or even a way for applicants to track their loans.
"We are also particularly troubled that these policy changes have not been communicated effectively and in a timely way to Congress, borrowers, SBA field offices and Resource Partners. Clear communication of policies and administrative changes is essential for small businesses accessing the funds," the lawmakers wrote.
According to their letter, as of May 30, the agency had made 707,613 economic injury disaster loans totaling nearly $55.8 billion, despite the fact that Congress had provided $50 billion in lending authority to support $366 billion in new lending.
The SBA has since reported about 1.33 million loans approved — for a total of $90.9 billion in total dollars, according to data through June 12.
The loans can be used to pay debts, payroll and other bills — including items not covered in the separate but popular $649 billion Paycheck Protection Program. The disaster loans are offered at a 3.75% interest rate for businesses and 2.75% interest rate for nonprofits.
The EIDL also comes with the chance to apply for a cash advance of up to $10,000. While the loans call for repayment, the cash advances need not be repaid, even for applicants who ultimately don't receive a loan. However, while the loans are tax-free, the tax status of the advances remains unclear.