Economic Injury Disaster Loan (EIDL)
Great news! The Small Business Administration (SBA) has reopened the Economic Injury Disaster Loan (EIDL) program to all small businesses affected by the COVID-19 pandemic. An EIDL is a loan of $500 up to $2 million with maturity up to 30 years. This loan provides economic relief to small businesses and non-profit organizations that are currently experiencing a temporary loss of revenue.
COVID-19 Economic Injury Disaster Loans
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).
PURPOSE
To meet financial obligations and operating expenses that could have been met had the disaster not occurred
TERMS
3.75% for businesses (fixed)
2.75% for nonprofits (fixed)
30 years
No pre-payment penalty or fees
USE OF PROCEEDS
Working capital & normal operating expenses
Example: continuation of health care benefits, rent, utilities, fixed debt payments.
COLLATERAL REQUIREMENTS
Required for loans over $25,000
SBA uses a general security agreement (UCC) designating business assets as collateral, e.g. machinery and equipment, furniture and fixtures, etc.
FORGIVABLE
NO – EIDL Loan
YES – EIDL Advance*
*Advance funds have been fully allocated and are not currently available
MATURITY
30 years
PAYMENTS
Deferred 1 year; interest still accrues
SBA is currently accepting new Economic Injury Disaster Loan (EIDL) applications from all qualified small businesses, including agricultural businesses, and private nonprofit organizations.
