EIDL Loans
What Are EIDL Loans?
The Economic Injury Disaster Loan Program (EIDL) provides up to $2 million to small businesses and private non-profit organizations that have experienced significant financial harm due to a declared disaster.
The goal of the loan program is not to replace lost profits or revenues. EIDLs focus on helping the company maintain a working capital position during the period affected by the crisis.
What You Need to Know About EIDL Loans
In order to qualify for an EIDL, businesses must meet specific requirements.
- The business or organization must have sustained economic injury as the direct result of a declared disaster.
- It must be located in a declared disaster area or contiguous county, parish, or jurisdiction.
- Assistance is available when the Small Business Administration (SBA) determines the company is unable to obtain credit elsewhere.
Who Is Eligible for EIDLs?
Small businesses, small agricultural cooperatives, and most private non-profit organizations may be eligible for an EIDL if they have suffered substantial economic injury and are located in a declared disaster area.
According to the Federal Emergency Management Agency (FEMA), a "disaster area" means that a governor has issued a formal statement that a disaster or emergency exceeds the state or local response or recovery capabilities.
The SBA defines "substantial economic injury" as the business being unable to pay its necessary and ordinary operating expenses as a direct result of the disaster.
What Does an EIDL Give Exactly?
Through the EIDL, the SBA can provide up to a maximum of $2 million to help meet these financial obligations that could have been met had the disaster not happened. The actual loan amount is based on the company's financial needs, regardless of any property damage.
The SBA has a separate loan program that covers property damage. In some cases, an entity may qualify for both an EIDL and a physical disaster loan.
An EIDL is intended to cover the following expenses until the crisis period is over:
- rent
- utility costs
- fixed debt payments
- health care benefits
Terms of an EIDL
Here are the standard terms of the loan:
- First payment deferred for 12 months
- No interest accrual for the first 12 months
- The interest rate will not be more than 4%
- Up to a maximum of 30 years (with repayment terms determined by the borrower's ability to repay the loan)
- No pre-payment penalty or fees
The borrower must authorize the SBA to review the business' tax records. Collateral –preferably in the form of real estate property– is required for loans over $25,000.
Loans up to $200,000 do not require the business owner to use their principal residence as collateral if the SBA determines the owner has other assets of a value equal to or greater than the loan amount.
Small businesses and non-profits that meet the above requirements may apply online for an EIDL loan or contact the SBA Disaster Assistance Customer Service Center at 800-659-2955 or disastercustomerservice@sba.gov.
Helpful Resources:
U.S. Small Business Administration - Economic Injury Disaster Loans
What Are EIDL Loans?
The Economic Injury Disaster Loan Program (EIDL) provides up to $2 million to small businesses and private non-profit organizations that have experienced significant financial harm due to a declared disaster.
The goal of the loan program is not to replace lost profits or revenues. EIDLs focus on helping the company maintain a working capital position during the period affected by the crisis.
What You Need to Know About EIDL Loans
In order to qualify for an EIDL, businesses must meet specific requirements.
- The business or organization must have sustained economic injury as the direct result of a declared disaster.
- It must be located in a declared disaster area or contiguous county, parish, or jurisdiction.
- Assistance is available when the Small Business Administration (SBA) determines the company is unable to obtain credit elsewhere.
Who Is Eligible for EIDLs?
Small businesses, small agricultural cooperatives, and most private non-profit organizations may be eligible for an EIDL if they have suffered substantial economic injury and are located in a declared disaster area.
According to the Federal Emergency Management Agency (FEMA), a "disaster area" means that a governor has issued a formal statement that a disaster or emergency exceeds the state or local response or recovery capabilities.
The SBA defines "substantial economic injury" as the business being unable to pay its necessary and ordinary operating expenses as a direct result of the disaster.
What Does an EIDL Give Exactly?
Through the EIDL, the SBA can provide up to a maximum of $2 million to help meet these financial obligations that could have been met had the disaster not happened. The actual loan amount is based on the company's financial needs, regardless of any property damage.
The SBA has a separate loan program that covers property damage. In some cases, an entity may qualify for both an EIDL and a physical disaster loan.
An EIDL is intended to cover the following expenses until the crisis period is over:
- rent
- utility costs
- fixed debt payments
- health care benefits
Terms of an EIDL
Here are the standard terms of the loan:
- First payment deferred for 12 months
- No interest accrual for the first 12 months
- The interest rate will not be more than 4%
- Up to a maximum of 30 years (with repayment terms determined by the borrower's ability to repay the loan)
- No pre-payment penalty or fees
The borrower must authorize the SBA to review the business' tax records. Collateral –preferably in the form of real estate property– is required for loans over $25,000.
Loans up to $200,000 do not require the business owner to use their principal residence as collateral if the SBA determines the owner has other assets of a value equal to or greater than the loan amount.
Small businesses and non-profits that meet the above requirements may apply online for an EIDL loan or contact the SBA Disaster Assistance Customer Service Center at 800-659-2955 or disastercustomerservice@sba.gov.
Helpful Resources:
U.S. Small Business Administration - Economic Injury Disaster Loans