Overview of Economic Injury Disaster Loans

The Small Business Administration’s Economic Injury Disaster Loans (EDIL) is a federal-sponsored financial assistance that offers working capital loans up to $2 million. The major benefactors of the disaster loans are a small business or private, non-profit organizations that have suffered a temporary loss of revenue due to the COVID-19 outbreak.

Who is eligible to apply for EIDL assistance?
Small business and private non-profit organizations that have sustained an economic injury in their declared county or contiguous country are eligible for EIDL assistance. The SBA has certified certain areas as an “Eligible Area” for EDIL assistance.

To view the list of eligible areas, refer either of the links below:

https://disasterloan.sba.gov/ela/Declarations/Index
OR
https://www.sba.gov/disaster-assistance/coronavirus-covid-19

This list is updated periodically depending on the gravity of the ground situation that exists due to the COVID-19 pandemic. There’s a likely possibility that your state might not be on the list but your county might have been approved as a contiguous county. In which case, the small employers in those counties can apply for a loan.

What are the terms of  EIDL assistance?
A sum of up to $2 million is approved as disaster assistance for small businesses. This includes both physical disaster loans and EIDLs. The interest rate is capped at 3.75 percent for small businesses without credit available elsewhere. Small businesses with credit available elsewhere are not eligible for this assistance.

As such the SBA doesn’t charge any upfront fees or early payment penalties. The maximum tenure of the loan is 30 years. 

How long does the approval process take?
From the date of submitting the application, the approval takes about 2-3 weeks. Once approved, it can take up to 5 days for the amount to be disbursed. Every borrower is assigned with an individual loan officer for servicing of the loan.

How do I apply for disaster loan assistance?
You can visit the SBA’s secure Disaster Loan Assistance website to submit your application. For more information about this program, you can visit https://www.sba.gov/funding-programs/disaster-assistance

For you to be eligible for EIDL assistance, you must  fit into any one of these categories.

• Applicant is a business 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, 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.