The Economic Injury Disaster Loan

 Who's eligible to apply?

The following businesses who have 500 or fewer employees or less than $35 million in annual revenue:

• -Sole proprietorships, with or without employees;
• -Independent contractors,
• -Cooperatives and employee owned businesses;
• -Tribal small businesses; and
• -Nonprofits that are exempt under 501(c), (d), or (e) (includes churches with or without tax- exempt status as long as they satisfy the requirements of 501(c) (3)) OR validly organized and operating under State law.

Other requirements:

• -Directly affected by the disaster
• -Businesses that offer services directly related to the businesses in the declaration
• -Other businesses indirectly related to the industry that is likely to be harmed by losses in their community (Example: Manufacturer of widgets may be eligible as well as the wholesaler and retailer of the product.)

What's the details?

• -Can include an advance of $10,000 within three days of applying for EDIL.
  • ~The emergency advance or "grant" of $10,000 does not have to be repaid.
• -Interest rates for businesses are 3.75% and 2.75% for nonprofits.
• -Can pay for expenses that could have been met had the disaster not occurred, including payroll and other operating expenses:
  • ~Fixed debts
  • ~Accounts payable
  • ~Some bills that can't be paid due to disaster's impact
• -Payments of principal and interest can be waived for the rest of 2020 (interest will accrue during this period).
• -No loan forgiveness.
• -EIDLs do not replace lost sales or revenue.
• -Maximum granted: $2 million.
• -The maximum term is 30 years. However, the law restricts businesses with credit available elsewhere to a maximum 3-years term. 

Criteria for loan approval:

• -Credit history- acceptable to SBA
• -Repayment- ability to repay the SBA loan
• -Eligibility:
  • ~Located (physical presence) within the declared disaster area
  • ~Have suffered, or are likely to suffer, substantial economic injury as a result of the disaster
  • ~Must be an independently owned and operated business
  • ~Do not have credit available elsewhere
  • ~The size of the applicant alone (without affiliates) must not exceed the size standard for the industry in which the applicant is primarily engaged
  • ~The size of the applicant combined with its affiliates must not exceed the size standard designated for either the primary industry of the applicant alone or the primary industry of the applicant and its affiliates, whichever is higher.
• -No collateral required for EIDLs under $25,000
• -SBA takes real estate as collateral when it is available
• -SBA will not decline a loan for lack of collateral, but requires borrowers to pledge what is available

 How do I apply?

• -You can apply immediately through the Small Business Administration (this link is to apply for an EDIL due to COVID-19).
• -It could take up 2-3 weeks or longer for SBA to review the application.