Cover photo for Economic Injury Disaster Loans

Economic Injury Disaster Loans

Small Business Association


In response to the Coronavirus (COVID-19) pandemic, small business owners, including agricultural businesses, and nonprofit organizations in all U.S. states, Washington D.C., and territories can apply for an Economic Injury Disaster Loan. The EIDL program is designed to provide economic relief to businesses that are currently experiencing a temporary loss of revenue due to coronavirus (COVID-19).

Program updates

As of September 8, 2021, new COVID EIDL policy changes have taken effect that entail the below updates to the program:

  • Maximum loan cap increased from $500,000 to $2 million

  • Use of funds was expanded to include payment and pre-payment of business non-federal debt incurred at any time (past or future) and payment of federal debt

  • Extend the deferment period to 24 months from origination for all loans (existing loans with a less than 24-month deferment will be adjusted)

  • Affiliation requirements simplified to an affiliate is a business that you control or in which you have 50% of more ownership

  • Developed additional path to meet program size standards for businesses assigned a NAICS code beginning with 61, 71, 72, 213, 3121, 315, 448, 451, 481, 485, 487, 511, 512, 515, 532, or 812

  • Exclusivity Period: From September 8, 2021 to October 8, 2021, the above policy changes will be applicable to applications for <$500K while applications for >$500K will not be approved and therefore receive the policy changes until October 8, 2021

  • See more details on the COVID-19 September 8, 2021 Policy Changes.


Eligibility

Must fulfill one field of eligibility:

  • Applicant is a business with not more than 500 employees

  • Applicant is an agricultural enterprise with not more than 500 employees

  • Applicant is an individual who operates under a sole proprietorship, with or without employees, or as an independent contractor

  • Applicant is a cooperative with not more than 500 employees

  • Applicant is an Employee Stock Ownership Plan (ESOP), as defined in 15 U.S.C. 632, with not more than 500 employees

  • Applicant is a tribal small business concern, as described in 15 U.S.C. 657a(b)(2)(C), with not more than 500 employees

  • Applicant is a business, including an agricultural cooperative, aquaculture enterprise, nursery, or producer cooperative (but excluding all other agricultural enterprises), with more than 500 employees that is small under SBA Size Standards found at https://www.sba.gov/size-standards.

  • Applicant is a business with more than 500 employees that is small under SBA Size Standards found at https://www.sba.gov/size-standards

  • Applicant is a private non-profit organization that is a non-governmental agency or entity that currently has an effective ruling letter from the IRS granting tax exemption under sections 501(c),(d), or (e) of the Internal Revenue Code of 1954, or satisfactory evidence from the State that the non-revenue producing organization or entity is a non-profit one organized or doing business under State law, or a faith-based organization.


Terms

Interest Rates

  • 3.75% for businesses (fixed)

  • 2.75% for nonprofits (fixed)

Term

  • 30 years

Deferment

  • Payments are deferred for the first 2 years (during which interest will accrue), and payments of principal and interest are made over the remaining 28 years. No penalty for prepayment.

Fees

  • For loans $25,000 or less: No fees if applying directly through SBA

  • For loans greater than $25,000: One-time $100 fee for filing a lien on borrower's business assets plus costs to file lien on real estate when applicable

  • For loans greater than $500,000 where SBA is taking real estate as collateral: One-time $100 fee for filing a lien on borrower's business assets. Additionally, the borrower will be responsible for recording the real estate lien and paying the associated fees.

Collateral and Personal Guaranty

  • Required for loans greater than $200,000.

Application Instructions

Please review the below supporting documents to navigate the application process:

Make sure you have these Required documents

To Apply for a New loan

If the small business is a first-time COVID EIDL applicant, complete the following steps to apply:

  1. Confirm eligibility (review FAQs)

  2. Complete Intake Form

  3. You will be emailed and invitation to sign up to create portal username.

  4. Complete portal steps and submit relevant documents

  5. Respond to SBA requests for signature, confirmation, and documents

The average SBA decision timeline for $500,000 or under is several weeks.

To Apply to Increase an existing EIDL Loan

If the small business has already obtained a loan via COVID EIDL before, complete the following steps to apply for a loan increase:

  1. Confirm Eligibility (review FAQs)

  2. Log onto Account on SBA Portal (do not apply for another loan) to submit loan modification

  3. Complete portal steps and submit relevant documents

  4. Respond to SBA requests for signature, confirmation, and documents

The average SBA decision timeline for $500,000 or under loans is several weeks.

To Apply for a Loan greater than $500K to $2 million

  • For loans greater than $500,000, applications will not be approved until after the exclusivity period ends on October 8, 2021, but they can be submitted before then. Applicants can choose to apply for $500,000 or under immediately and then for over $500,000 funds after the exclusivity period ends, or they can choose to apply immediately for all desired funds above $500,000 and have their application wait for approval starting October 8, 2021.

The average SBA decision timeline for greater than $500,000 loans is one and a half months.

Support


Resources



Details

Organization

Small Business Association (SBA)

Financial Instrument

Loan

Image Credit

JESHOOTS.COM


Updated September 17, 2021

This information was gathered from public sources. Ambrook is not responsible for or able to affect the results of any financial programs listed, nor are they responsible for any incorrect information that is listed or is on the hyperlinked external sites. All information is subject to change.


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