The Small Business Administration’s (SBA) disaster loans are the primary form of Federal assistance for the repair and rebuilding of non-farm, private sector disaster losses. The disaster loan program is the only form of SBA assistance not limited to small businesses.
The Economic Injury Disaster Loan Program (EIDL) can provide up to $2 million of financial assistance (actual loan amounts are based on amount of economic injury) to small businesses or private, non-profit organizations that suffer substantial economic injury as a result of the declared disaster, regardless of whether the applicant sustained physical damage. The CARES Act temporarily expands eligibility for SBA economic injury disaster loans (EIDL) and provides an emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19 within 3 days of applying for an SBA Economic Injury Disaster Loan (EIDL). To access the advance, you first apply for an EIDL and then request the advance. The advance does not need to be repaid under any circumstance, and may be used to keep employees on payroll, to pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent, and mortgage payments.
An EIDL can help you meet necessary financial obligations that your business or private, non-profit organization could have met had the disaster not occurred. It provides relief from economic injury caused directly by the disaster and permits you to maintain a reasonable working capital position during the period affected by the disaster. EIDLs do not replace lost sales or revenue.
Eligibility
In addition to the entities that are already eligible for SBA disaster loans (small businesses, private non-profits, and small agriculture cooperatives), eligibility is temporarily expanded to include:
- Business entities with 500 or fewer employees:
- Sole proprietorships, with or without employees
- Independent contractors
- Cooperatives and employee owned businesses
- Tribal small businesses
- Private non-profits of any size.
Additionally, you must have been in business as of January 31, 2020. Expanded eligibility criteria and the emergency grants are only available between January 31, 2020 and December 31, 2020.
Program Requirements
To be eligible for EIDL assistance, small businesses or private non-profit organizations must have sustained economic injury and be located in a disaster declared parish or contiguous parish. All 64 parishes in Louisiana have been declared a disaster area.
Loan Terms
The SBA’s Economic Injury Disaster Loan (EIDL) program provides small businesses with working capital loans of up to $2 million to help overcome the temporary loss of revenue. There are no upfront fees or early payment penalties charged by SBA. The repayment term will be determined by your ability to repay the loan.
▪ The loans may be used to pay fixed debts, payroll, accounts payable, or other bills that can’t be paid because of the COVID-19 outbreak.
▪ The interest rate is 3.75 percent for small businesses without credit available elsewhere, and businesses with credit available elsewhere are not eligible to apply for assistance.
▪ The maximum term is 30 years.
▪ A small business is defined by the SBA’s Size Standards in accordance with the Native American Industry Classification System (NAICS) codes and SBA’s Size Standards Tool can be utilized.
How to Apply
- You can apply for an EIDL online with the SBA.
- When you apply, you can request the emergency grant of $10,000.
- The SBA will provide the grant within 3 days of receiving your application.
- You will not have to repay the grant, even if your application for a loan is denied.
- You can visit an SBA resource partner who can help guide you through the loan application process. You can find your nearest Small Business Development Center (SBDC) here.
For application information or to check the status of your application, please call 1-800-659-2955 or email DisasterCustomerService@sba.gov
Can I apply for other SBA loan programs?
A business can obtain a new Paycheck Protection loan AND an SBA Economic Injury Disaster Loan so long as they are used for different expenses. Also, the amount forgiven under a Paycheck Protection loan will be decreased by the $10,000 grant/advance.
Contact Information
For more information about this program or to apply, please visit the Economic Injury Disaster Loan page. More information about small business programs in the CARES Act can be found on the U.S. Senate Committee on Small Business and Entrepreneurship website.
Detailed pdf of SBA Presentation
Economic Injury Disaster Loan (EIDL) vs. Payroll Protection Program (PPP)- Comparison Chart
