The Economic Injury Disaster Loan (EIDL) program

SBA disaster loan application form on the wooden surface.

The SBA’s Economic Injury Disaster Loan (EIDL) program provides vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing as a result of the COVID-19 pandemic. Federal Disaster Loans are available for Businesses, Private Nonprofits, Homeowners, and Renters. This isn’t new – it’s a similar program to other loans available to declared victims of disasters such as hurricanes, tornados, earthquakes, fires, etc. However, for COVID-19, the program has been expanded and provides emergency grants of up to $10,000 – theoretically within three days – and low-interest loans up to $2 million.  

Who qualifies?

This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by COVID-19.

Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.

What are the Loan terms?

According to the SBA, no matter the amount you apply for, the Economic Injury Disaster Loan advances funds (up to $10,000) and will be made available within days of a successful application.  This loan advance will not have to be repaid, so in other words, the first $10k of the loan is effectively a grant. 

The amount of your grant (up to $10,000), which you request when you fill out your EIDL application, is determined by the number of employees you have at $1,000 per employee with a maximum grant of $10,000. For example: If you have three employees, you will receive $3,000. That amount will be deducted from the loan forgiveness amount of any PPP loan you receive and should arrive within days of your EIDL loan application, according to the SBA.

You can apply for an EIDL of up to $2 million to provide working capital for expenses such as fixed debt and payroll costs. The interest rate is 3.75% and the loan term can be as long as 30 years. The COVID-19 EIDL includes an automatic one-year deferral on repayment, though interest begins to accrue when the loan is disbursed.

How to Apply

Unlike the Paycheck Protection Program, which requires you apply with a local lender, for an EIDL loan, you don’t have to go through a bank. You can apply through the SBA on their website.

The application process has been streamlined and the SBA says it should take you two hours and ten minutes or less to complete.

The application can be found on the SBA Disaster Assistance web page. You must apply no later than Dec. 16, 2020 in most states. A few have extended the deadline to Dec. 21.

You Can Apply for a PPP Loan Too

SBA guidance allows you to apply for a PPP loan in addition to an EIDL, so long as you don’t use the funds from each loan for the same expenses.

For example, if you decide to apply for a PPP loan and use those funds strictly for payroll, you cannot subsequently use funds from an EIDL for payroll, as well. If your EIDL loan was used for payroll costs, your PPP loan must be used to refinance your EIDL loan. Proceeds from any advance up to $10,000 on the EIDL loan will be deducted from the loan forgiveness amount on the PPP loan.


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