Emergency Economic Injury Disaster Loans (EIDL) and Up To $10K EIDL Grants

The SBA also offers a direct loan product for businesses in a designated disaster area, which now includes all 50 states due to COVID-19 outbreak. Applications are made directly on the SBA’s website using a streamlined COVID-19 application. From January 1, 2020 to December 31, 2020, a loan applicant can receive a prompt advance of up to $10,000 that does not need to be repaid (even if the disaster loan is ultimately denied). The cash advance can be used for any allowable use (see below). If an applicant also receives a PPP loan, the advance on the EIDL loan will be deducted from the loan forgiveness amount on the PPP loan.

Eligible entity. Eligible applicants include a business or cooperative with not more than 500 employees (including sole proprietorships and self-employed individuals) and private nonprofit organizations. A full list is provided on the SBA’s website application page. For COVID-19 related loans, there no need to satisfy the 1-year operating history requirement that typically applies for SBA economic injury loans, but the business must have been in operation on January 31, 2020. Likewise, there is no need to show that applicant is unable to obtain credit elsewhere.

Allowable uses. Proceeds from an EIDL can be used for any purpose allowed under Section 7(b)(2) of the Small Business Administration Act, including providing paid sick leave to employees unable to work, maintaining payroll to retain employees, meeting increased costs to obtain materials, making rent or mortgage payments, and repaying other obligations.

Maximum loan amount. $2 million

Maximum term. 30 years

Interest rate. 3.75% per year for small businesses and 2.75% for non-profits.

Personal Guarantee Waiver. There is no personal guarantee requirement if the loan is in response to COVID-19 and the total of all such disaster loans from January 1, 2020 to December 30, 2000 is less than $25,000.

Where to apply?

https://covid19relief.sba.gov/#/

My Business has been hurt by this disaster, will I automatically get a loan?

Unfortunately no. As with all loans the fundamental thing to demonstrate, apart from eligibility, is the ability of the business to generate cash flow and repay the loan. These are working capital loans intended to replace revenues lost as a result of the disaster. The business must be able to show that before the disaster, the business was sound and solvent.

If I apply for funding do I have to take it?

No, if you apply for funding and are approved you can “shelve” your application for up to six months.

How long will the EIDL take to fund?

Provided that you applied after 3/30 on the new quick portal, if you checked that you are interested in getting the $10,000 advance you should have the first $10,000 in about three days. As for the rest of the funds the SBA should reach out to you for additional documents and information within 21 days.

Daily EIDL Application Help - 10:30am and 8:00pm. On the ZOOM call, the SBA agent will walk you through how to fill out the EIDL form. Have all your necessary documents ready. Download the ZOOM app. Free. Meeting # 6794772946.

The SBA has provided a PowerPoint Presentation on Applying for an Economic Injury Disaster Loan (see below).