Economic Injury Disaster Loan (EIDL)
WHAT YOU NEED TO KNOW
The SBA is now offering low-interest, long-term federal disaster loans for working capital to organizations suffering substantial economic injury as a result of the COVID-19 pandemic.
These Economic Injury Disaster Loans (EIDLs) are specifically available to the following organizations directly affected by the disaster:
• Small businesses within the SBA Size Standards (visit
https://www.sba.gov/size)
• Small agricultural cooperatives & aquaculture
businesses
• Private non-profit organizations (regardless of size)
What are some types of organizations that are ineligible to receive an Economic Injury Disaster Loan?
•Religious organizations
•Charitable organizations
•Gambling concerns (i.e., businesses that derive more that 1/3 of their annual gross revenue from legal gambling activities)
How much can I borrow?
•Eligible entities may qualify for loan amounts of up to $2 million.
•Interest rates on this disaster loan are 3.75% for small businesses and 2.75 % for non-profit organizations.
•Terms of up to 30 years are available with the first payment due 12 months after funds are issued.
How can I use EIDL funds?
• These are working capital loans that may be used to pay fixed debts, payroll, accounts payable, and other bills that could have been paid had the disaster not occurred.
• Economic Injury Disaster Loans help entities stay afloat during the declared disaster, ready to “restart” their operations once circumstances allow.
• EIDLs are not meant for business expansion.
General Loan Approval Criteria
Credit History – Applicants must have a credit history acceptable to the SBA.
Repayment Ability – The SBA must determine that the applicant business has the ability to repay the Economic Injury Disaster Loan.
Eligibility – The applicant business must be physically located in a disaster-designated area and have suffered working capital losses due to the declared disaster.
What are the collateral requirements?
• Economic Injury Disaster Loans of over $25,000 require collateral.
• The SBA takes real estate as collateral when it is available.
• The SBA will not decline a loan for lack of collateral but requires borrowers to pledge what is available.
• Given the severity of the COVID-19 pandemic and its economic impacts, the SBA will make reasonable efforts to work with applicants
toward a favorable decision.
STREAMLINED PROCESS REQUIREMENTS
SBA is collecting the requested information in order to make a loan under SBA’s Economic Injury Disaster Loan Program to the qualified entities listed in this application that are impacted by the Coronavirus (COVID-19). The information will be used in determining whether the applicant is eligible for an economic injury loan. If you do not submit all the information requested, your loan cannot be fully processed.
The Applicant understands that the SBA is relying upon the self-certifications contained in this application to verify that the Applicant is an eligible entity to receive the advance, and that the Applicant is providing this self-certification under penalty of perjury pursuant to 28 U.S.C. 1746 for verification purposes.
The estimated time for completing this entire application is two hours and ten minutes, although you may not need to complete all parts. You are not required to respond to this collection of information unless it displays a currently valid OMB approval number.
ELIGIBLE ENTITY VERIFICATION
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.
Review All of the Following:
Applicant must review and check all the following (If Applicant is unable to check all of the following, Applicant is not an Eligible Entity):
Applicant is not engaged in any illegal activity (as defined by Federal guidelines).
No principal of the Applicant with a 50 percent or greater ownership interest is more than sixty (60) days delinquent on child support obligations.
Applicant is not an agricultural enterprise (e.g., farm), other than an aquaculture enterprise, agricultural cooperative, or nursery.
Applicant does not present live performances of a prurient sexual nature or derive directly or indirectly more than de minimis gross revenue through the sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature.
Applicant does not derive more than one-third of gross annual revenue from legal gambling activities.
Applicant is not in the business of lobbying.
Applicant cannot be a state, local, or municipal government entity and cannot be a member of Congress.