INSIGHTi
Supplemental Appropriations: SBA Disaster
Loan Account
June 22, 2020
In response to the Coronavirus Disease 2019 (COVID-19) pandemic’s widespread adverse economic
impact on the national economy, Congress made COVID-19-related economy injury an eligible expense
for Small Business Administration (SBA) Economic Injury Disaster Loans (EIDL). Congress also
provided SBA an additional $20 million for SBA disaster assistance administrative expenses (P.L. 116-
123, Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020). At that time, the
SBA had about $1.1 billion in its disaster loan credit subsidy account to support about $7 billion in
disaster loans. These funds are available until expended and are used to pay for disaster loan defaults and
related expenses.
The SBA has several types of disaster loan programs to assist individuals, households, and businesses in
federally declared disaster areas. EIDL provides loans of up to $2 million to help businesses recover from
economic losses and can be used to pay for expenses that could have been met had the disaster not
occurred, including working capital needs such as fixed debt and other operating expenses such as
payroll.
In response to the magnitude of the COVID-19 pandemic’s adverse economic impact on small businesses,
Congress expanded EIDL eligibility for certain small businesses and nonprofit organizations, and
established an Emergency EIDL grant program (P.L. 116-136, Coronavirus Aid, Relief, and Economic
Security Act (CARES Act)). The CARES Act provided an additional $562 million to support the EIDL
and $10 billion to support the Emergency EIDL grant program, which was authorized to provide up to
$10,000 to small businesses that could demonstrate COVID-19-related economic damages. The
Emergency EIDL grant is an advance payment that can be requested by an EIDL applicant. Applicants
can keep the advance even if they are turned down for the loan.
In anticipation of high demand, the SBA limited COVID-19-related EIDL to $150,000, and Emergency
EIDL grants to $1,000 per employee, up to the statutory cap of $10,000. Despite these limits, the SBA
stopped accepting COVID-19-related EIDL and Emergency EIDL grant applications on April 15, 2020,
less than two weeks after the programs started accepting applications, because funding to support these
programs was nearly exhausted. Congress responded by providing $50 billion in additional funding to
support EIDL and another $10 billion to support the Emergency EIDL grant program. The SBA began
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accepting new EIDL and Emergency EIDL grant applications on a limited basis on May 4, 2020, to
accommodate agricultural businesses that were provided EIDL eligibility by the Paycheck Protection
Program and Healthcare Enhancement Act (P.L. 116-139), and resumed the acceptance of new EIDL and
Emergency EIDL grant applications from all borrowers on June 15, 2020.
The SBA reports that, as of June 20, 2020, it had approved over 1.7 million COVID-19-related EIDL
loans totaling over $113.3 billion, and over 3.7 million Emergency EIDL grants totaling over $12.3
billion.
Table 1 summarizes the supplemental funding provided to the SBA for disaster assistance in response to
COVID-19.
Table 1. Supplemental Appropriations to the Disaster Loan Program in Response to
COVID-19
Public Law Number, Division, and Bill
Title
Appropriation
Purpose
P.L. 116-123, Division A
$20,000,000
P.L. 116-123 appropriated $20
Coronavirus Preparedness and Response
mil ion to carry out administrative
Supplemental Appropriations Act, 2020
expenses associated with the SBA
Disaster Loan Program
P.L. 116-136, Division B
$10,562,000,000
P.L. 116-136 appropriated $10
CARES Act
billion for Emergency EIDL Grants
and $562 mil ion to support EIDL
P.L. 116-139, Division B
$60,000,000,000
P.L. 116-139 appropriated $10
Paycheck Protection Program and Health
bil ion for Emergency EIDL Grants,
Care Enhancement Act
and $50 bil ion to support EIDL
Source: Based on CRS interpretation of appropriation laws.
Additional CRS Resources
CRS resources on business recovery include:
CRS Report R46284, COVID-19 Relief Assistance to Small Businesses: Issues and Policy
Options
CRS Report R44412, SBA Disaster Loan Program: Frequently Asked Questions
CRS Insight IN11301, Small Businesses and COVID-19: Relief and Assistance Resources
CRS Insight IN11357, COVID-19-Related Loan Assistance for Agricultural Enterprises
CRS Insight IN11370, SBA EIDL and Emergency EIDL Grants for COVID-19
CRS Report R46325, Fourth COVID-19 Relief Package (P.L. 116-139): In Brief
CRS Report R46285, Coronavirus Preparedness and Response Supplemental
Appropriations Act, 2020 (P.L. 116-123): First Coronavirus Supplemental
CRS Insight IN11402, The Economic Development Administration’s Economic Recovery
Assistance for COVID-19 Impacted Communities
CRS Insight IN11418, COVID-19: EDA Revolving Loan Funds for Businesses
CRS Insight IN11228, COVID-19: Federal Economic Development Tools and Potential
Responses
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Author Information
Bruce R. Lindsay, Coordinator
Jared C. Nagel
Analyst in American National Government
Senior Research Librarian
Robert Jay Dilger
Senior Specialist in American National Government
Disclaimer
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to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of
Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of
information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.
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