U.S. Lenders Raise Cap on Small-Business Disaster Loans

Companies that have sustained heavy losses as a result of the pandemic may soon borrow up to $500,000 from the Small Business Administration via their emergency lending program.

Small Business Administration admin Isabella Casillas Guzman increased the cap after an announcement on Wednesday where she acknowledged the prolonged length of the pandemic and its effects on small businesses. 

The cap on loans that small businesses could take out was significantly smaller, around $150,000, due to fear that a run on loans due to pandemic lockdowns would dry up funds. The Small Business Administration has signed $200 billion in disaster loans to 3.8 million borrowers since it started, only one year ago.

Currently their fund has $270 billion left to lend through its pandemic relief program program. Loans paid to business by the Small Business Administration must be paid in full, but offer low interest rates and a well-spaced repayment schedule to ensure businesses can capitalize on their investments.

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