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SBA increasing amount of money businesses can borrow, extending time to pay it back

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Posted at 2:10 PM, Mar 30, 2021
and last updated 2021-03-30 14:27:26-04

For Alpha Coffee, the pandemic has been a financial grind.

“It was a gut punch. It really was,” said owner Carl Churchill.

He says the COVID-19 crisis cost his small business big money.

To help clot the financial bleeding, Churchill took an $80,000 loan from the Small Business Administration. With 33 employees to pay and other expenses, however, that money went fast.

“Our payroll is about $45,000 every two weeks. Our rent is about $10,000 a month,” he said. “At the end of the day, we’re making a small amount of money. So, the margins are really thin.”

Now, the SBA is increasing the amount of money it’s lending while also extending the timeline to pay it back.

“Having this Economic Injury Disaster Loan is just one additional resource to help businesses out there that are struggling,” said Alejandro Contreras with the SBA’s Office of Disaster Assistance.

He says the SBA has done 3.8 million loans under the Economic Injury Disaster Loan Program. Now, that loan limit is growing from a $150,000 cap to $500,000 and payments can be deferred up to 18 months.

“Giving them additional time to hopefully resume back to normal operations and not have to worry for the next year,” Contreras said.

Moving forward, the SBA is looking to increase loan limits even more, going up to $2 million for those that qualify.

For Churchill, more money could mean opportunities for has small business to succeed as his coffee shop looks to continue its grind.

“Most small businesses aren’t looking for a handout. They’re just looking for help,” he said. “We’re just going to continue to do what small businesses have always done: tighten our belts, roll up our sleeves and get to work.”