PLEASE NOTE: With the passage of the CARES Act on March 27, there have been a few changes to this program, including loan forgiveness provisions. We are working to update this page.
About the Economic Injury Disaster Loan
- Economic Injury Disaster Loans (EIDLs) are working capital loans to help small businesses, non-profit organizations and self employment enterprises meet financial obligations that cannot be met as a direct result of the disaster. These loans are intended to assist through the disaster recovery period.
- Loans of up to $2 million to small business enterprises (SBE’s), Not for Profits (NFP’s) and self-employment enterprises are available
- All US states will have a declaration of disaster related to COVID-19. However, applicants must apply only for those events that occurred within the state for which they are claiming disaster impact.
- Loans are coming from Treasury and will go through the Small Business Administration (SBA) directly to the qualified applicant – not through a bank
- If your business has an existing SBA loan, the SBA has authorized deferment. Contact your banker for more information.
- Visit https://disasterloan.sba.gov/ela/Information/EIDLLoans to learn more
Interest Rates and Loan Terms
- Rates as of now are: 3.75% for SBE’s and 2.75% for NFP’s
- Terms can be as long as 30 years fixed; however, anticipate that most loans will be 15-20 years
- There is no penalty for pre-payment
- Congress sets the rates; if rates decrease, loans will reflect this
- EIDL’s offer 12-month deferrals on principle and interest; however, interest accrues from date of loan
- This loan is available to small business enterprises (SBE’s) and to Not for Profits (NFP’s)
- Self-employment also qualifies for this loan
- If you have an existing disaster loan from a previous qualifying disaster event, you can still apply for this EIDL; however, you cannot consolidate these loans
- To determine if your business qualifies as a small business, enter your business’s NAICS code into sba.gov/size. Your NAICS code will establish whether the SBA will use the number of employees or your annual revenue to qualify you as an SBE
- To find your NAICS code, visit: naics.com/search
Eligible Uses of the Loan
- Payment of fixed debts
- Accounts Payable
- Any other bills that could have been paid, had the disaster not occurred
- Businesses using credit cards today to pay expenses – documented use of said cards is considered an eligible use
About the Application Process
- There is no cost to apply
- Apply early
- Apply by going to disasterloan.sba.gov/ela or by clicking the green button below
- Process may still take 30-45 days depending upon how quickly and completely all required forms are submitted to SBA
- If offered a loan, you have up to 6 months to take the loan. You can deny the loan as well.
- SBA will take subordinate position
- Loan requests for more than $25,000 will require some collateral. You will work with your loan officer to determine qualified collateral.
- Working Capital loans of less than $25,000 can be unsecured
- Working Capital Loan requests cannot replace ‘lost sales’ due to this qualifying disaster
- Businesses requesting more than $500,000 must be able to provide SBA with current years’ tax filings; if less than $500,000 is being requested, you will only need the previous 3 years of tax returns.
- New businesses lacking tax returns should still apply
- Applicants cannot ask for a set loan amount. Once you apply, your SBA loan officer will work with you to determine a loan amount to meet your needs.
- SBA will also look at what may be covered by your existing business interruption insurance
- You will be required to complete certain forms in full, to submit with your loan application. It is imperative that you use the exact matching name on all SBA forms that is used in filing your tax returns.
- Apply electronically – online. Paper forms can be downloaded however SBA cautions that such actions will delay the process.