Economic Injury Disaster Loan (EIDL)
The SBA offers Economic Injury Disaster Loans to help small businesses meet working capital needs caused by a natural disaster.
Should I apply for an Economic Injury Disaster Loan (EIDL)?
Does my business qualify for the EIDL?
1. Were you in operation by or before January 31, 2020?
2. Do you have less than 500 employees?
3. Is your business unable to pay normal and necessary operating expenses because of COVID-19?
Your business does not qualify
Are you willing to pledge assets if the business cannot repay the loan?
How much will I qualify for?
Your business qualifies
Up to $200,000; loan amount will correlate with the loss suffered
Up to $2,000,000; loan amount will correlate with the loss suffered
Is the loan forgivable?
What are the terms of the loan?
Financial obligations and operating expenses that could have been met had the disaster not occurred*
What can the loan be used for?
$10K of the emergency advance is forgiveable. The rest of the loan is generally not forgivable. It will be up to the SBA based on the businesses needs
1.Up to 30 year term
2.Max of 3.75% interest rate
3.No loan fees
4.12 months before payments start
*Note, if the business is also receiving a PPP Loan, then the loans cannot be used for the same purpose. More guidance is expected from the SBA on this.
Key Benefits of the EIDL:
Borrowers who need an immediate influx of funds may request an emergency advance up to $10,000 within 3 days after the SBA receives the application. This advance is forgivable and does not need to be paid back.
Low Interest Rate
Maximum rate with a max of 3.75%
30-Year Maturity Available
Businesses can receive terms up to 30 years
What can the EIDL be used for?
Sick leave to employees unable to work due to COVID-19
Payroll costs and employee commissions or similar compensations
Rent or mortgage payments
Increased material costs due to interrupted supply chains
Repaying obligations that cannot be met due to revenue losses
How to apply for the EIDL?
Apply directly to the SBA here. The application will take from 6-8 hours to complete. Be aware, the SBA has had issues with its website due to high traffic and demand.
When should I apply for the EIDL?
You can apply for the loan today.
What else should I know about this loan?
If you have already applied for the PPP loan or are planning to apply, please note, you must apply for each of these loans for different financial purposes. For example, you may apply for the EIDL for working capital reasons and for the PPP loan applying for payroll, however you cannot apply for both loans for payroll. This is important in order to keep your PPP loan as a forgivable loan. If you have already received the EIDL and are applying for the PPP loan, then you can pay off the EIDL loan with the PPP loan, or consult the SBA for more guidance.
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