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Small Business Disaster Loan Enhancement Act

On July 2, Senators Brian Schatz (D- Hawaii) and Catherine Cortez-Masto (D-Nev.) introduced the Small Business Disaster Loan Enhancement Act of 2020 to boost funding and lower interest rates for the Small Business Administration’s Economic Injury Disaster Loan (EIDL) program.

Unlike the Paycheck Protection Program (PPP), most nonprofit organizations are eligible for relief through the EIDL program, which also allows for more flexibility and can be used to cover a wide range of costs relative to the PPP.

Specifically, this bill calls for the following:
  • Lower interest rates to one percent, in line with the PPP loan rate;
  • Allow new EIDL loan applicants to receive up to $2 million, based on their financial need;
  • Enable current EIDL loan recipients to request an increase in their EIDL loan up to $2 million, based on their financial need;
  • Require the SBA to provide the full amount of the EIDL advance requested by an applicant, up to $10,000;
  • Create a new EIDL advance of up to $25,000 for applicants that have experienced a reduction of 50 percent or more in gross receipts from a comparable 8-week period before the public health crisis began; and
  • Provide an additional $80 billion for EIDL loans and $20 billion for EIDL advances.
We still expect a major COVID-19 relief package later this month.

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