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Chad Morris
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The SBA Economic Injury Disaster Loans (EIDL) | COVID-19 Relief

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If the coronavirus epidemic has impacted your small business, it may be eligible for an SBA COVID-19 loan. The US government, acting through the Small Business Administration (SBA), has launched the Economic Injury Disaster Loan (EIDL) program. This service assists small businesses that have suffered economic hardship because of COVID-19

Everything you need to know about the EIDL

The Economic Injury Disaster Loan was created to aid small businesses through hard times. Learn everything you need to know about this program.

What is the EIDL?

The Economic Injury Disaster Loan (EIDL) program is a low-cost service from the US government. It provides loans to small businesses that have been hard hit economically by a declared disaster. All 50 states, US territories and the District of Columbia have been declared disaster areas because of the COVID-19 outbreak.  

An SBA COVID-19 loan is available through the EIDL program. Both non-profit organizations and small businesses are eligible. As of July 3, the SBA reports that it has approved 2,235,192 EIDLs, totaling more than $134 billion.

What’s the interest rate that EIDL loans carry? 

An SBA COVID-19 loan is a low-interest loan. The Annual Percentage Rate (APR) is 3.75% for small businesses. For non-profits, the rate is 2.75%. Both rates are fixed. 

Borrowers who take out an Economic Injury Disaster Loan have a long time to repay it. The SBA offers terms up to 30 years. The exact term on a specific loan is determined by the borrower’s ability to repay the loan. 

How much can you borrow? 

EIDL borrowers are eligible for loans up to $2,000,000, although the SBA has capped maximum loan size at $150,000. This includes both economic hardship and physical damage. 

Physical damage would be from something like a hurricane. Economic hardship includes things like reduced revenue because of the COVID-19 pandemic

Of the total loan amount, the first $10,000 can be distributed by the SBA within three days. Although this is helpful, it is three days from the day an application is approved. The total time from the submission of an application to the receipt of the first $10,000 could be 2-3 weeks, according to the government

One of the great features of loans through the EIDL program is that the $10,000 loan advance doesn’t have to be paid back. It’s a grant. 

On top of this generous policy, the SBA allows principal and interest on the whole loan to be deferred (not be paid back) for up to four years. 

Along with the deferral, an SBA COVID-19 loan comes with no fees upfront. And you can pay off a COVID-19 loan early: there are no prepayment fees.

What can the money be used for? 

Money received from the EIDL program can be used to meet small business expenses that could have been met had the coronavirus outbreak not occurred. These items include things like operating expenses, employee salaries, inventory or pay debts.

What Are the Requirements?  

You’ll need to meet various criteria to qualify for the EIDL program: 

  • You’ll need to have been in business since January 31, 2020.
  • Your small business must have 500 or fewer employees. 
  • The SBA has extended the EIDL program to include independent contractors and freelancers.
  • Also eligible for an SBA COVID-19 loan are sole proprietorships, small tribal businesses, private non-profit groups and agricultural enterprises. 
  • The SBA is not restricting its emergency loans to just US citizens. Green card holders can qualify.
  • Since the “Business Owner Information” section in the application asks for an SSN, small business owners who aren’t legal permanent residents may use an ITIN instead of an SSN.

Important note: Due to high demand for the EIDL program, the SBA is no longer accepting COVID-19 related EIDL applications except for applications from agricultural businesses. Applicants who have already submitted their applications will continue to be processed on a first-come, first-served basis.

Not elegible? Learn what you can do if you don’t apply for government relief programs.

How to Apply

If you meet the SBA’s requirements, we do encourage you to apply for a COVID-19 Economic Injury Disaster Loan. You can apply online. Click here to go to the application. 

If you’re unsure whether you qualify, the SBA has a user-friendly tool that can help you determine your eligibility.  

The EIDL program ends on December 31, 2020. So you shouldn’t delay. 

Because of the high level of demand expected for the SBA’s COVID-19 loans, the government’s online application may experience outages. This, unfortunately, has already occurred. Thus, it may take longer than 2-3 weeks to get your first check. 

If you have any questions during the application process or need assistance, contact the SBA. The agency’s phone number is 1-800-659-2955. 

You can also e-mail the SBA with questions: [email protected]

Economic Injury Disaster Loans (EIDL) at a glance

Max Size of Loan $2,000,000 (although for now, the SBA has capped maximum loan size at $150,000)
Interest Rate Fixed 3.75% (for profit); 2.75% (non profits)
Max Term 30 years
Requirements & Eligibility
  • Less than 500 employees or (ii) be a “small business” under the applicable NAICS code employee size standard, including employee count of Affiliates
  • Eligible Parties
    • Small Businesses, including sole proprietorships, with or without employees
    • Independent contractors
    • Cooperatives and employee-owned businesses
    • Private non-profits
    • Tribal small businesses
    • Agricultural enterprises
  • See more guidance on requirements here
Other Considerations
  • Eligible deferment of principal and interest up to four years
  • An initial advance of up to $10,000 in the first three days [from approval] and then remaining capital is further evaluated and disbursed
  • Important note: Due to high demand for the EIDL program, the SBA is no longer accepting COVID-19 related EIDL applications except for applications from agricultural businesses
How to apply? To apply for the EIDL, a business owner can apply directly online at the following website: https://disasterloan.sba.gov/ela/
Turnaround time
  • Expected turnaround time of up to two weeks for initial deployment of $10,000 cash advance
  • However, the site has been experiencing outages with a growing queue of applications

Other Assistance Is Available

If your small business doesn’t qualify for a COVID-19 loan through the EIDL program, there are other forms of assistance available. 

Payment Protection Program (PPP) Loans

Another loan program created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act is the Payment Protection Program. A small business can get up to $10 million in forgivable loans under PPP. 

For PPP money to be forgivable, funds must be used to meet payroll. This program expires earlier than the EIDL program. The deadline is August 8, 2020. 

Learn more about the PPP program.

Other state and private institution programs

There are many different programs that state governments and private institutions have created.

Learn more about these programs.

Ask for Help, You are Not Alone

We sincerely recommend that you apply for any government assistance that is available for your small business. Loans and grants can help your business during this crisis. 

But if you don’t qualify, for whatever reason, we recommend you look for other forms of aid so that your small business can survive this economic downturn. 

An option is a small business loan. At Camino Financial, our motto is “No business left behind”, and we work every day, and especially now, with this in mind. If we can help you, we will. 

We can help your business weather this storm. Let us be your partner during this difficult time. 

Click here to apply for a Camino Financial business loan.

Read more articles and find some more helpful resources to help you during this crisis:

COVID-19: Small Business Resources, coronavirus, Camino financial

COVID-19: Small Business Resources

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