Recent updates from SBA: As per the announcement made by the Small Business Administration, because of the COVID-19 recently passed relief bills, there has been an extension to apply for the SBA Economic Injury Disaster Loan. The date has been postponed to December 31st, 2021. Read more about
In case both the Small Business Owners and non-profit owners are affected by COVID-19 in all of the states of US, they are eligible to apply for the Economic Injury Disaster Loan (EIDL) up to $2,000,000 through SBA. After they have applied, for the next 3 days, they are also qualified for certain more to advance their emergency policies up to an amount of $10,000.
One doesn’t have to repay the advance no matter what the circumstance, and so the business owners can avail SBA EILD Loan and:
- Retain their staff members lover payroll,
- Payment for sick leave,
- Rent & mortgages payouts, including depts,
- Pay business obligations,
- Meet increased production cost because of disruptions of supply chain, and
- Many more.
EIDL Loan Terms
The money left in addition for EIDL will be calculated as per how your business has been affected by the pandemic situation.
So, here are certain EIDL Loan Terms along with the rates specifically made to meet under EIDL program.
- Maximum amount of $2,000,000
- The amount that has been proceeded can be applied to work with capital needed like those payroll and fixed debits.
- Loan amounts: Up to $500,000 for loans issued starting the week of April 6, 2021. In case you have received less amount, you can request additional funding up to that amount.
- Deferment: Payments are automatically deferred after 1 to 2 years, as to when you received the loan. However, you can avail to make transactions (with interest added. The amount is automatically deferment for 1 year on repayment in order to subdue the first payment for a full year
- Repayment terms: Loan term is taken up to 30 years, as per the needs of the borrower
- Interest rate: The interest rate is 3.75% for businesses, and 2.75% for non-profits.
- Uses: It includes the operating expenses like real-estate payments, inventory, equipment purchases, working capital, and more. This is not intended to replace lost profits/sales or for any business growth.
- Collateral: Required for loan amounts over $25,000
- Personal guarantee: Required for loan amounts over $200,000
- Forgivable: The EIDL SBA Advances are forgivable, however, you must repay Economic Injury Disaster Loans.
Eligibility for SBA EIDL Loan
In order to be qualify for the standard SBA loan needs, one has to meet certain criteria and min credit standards. Unlike to SBA loan, it is quite different when it comes to COVID_19 Economic Disaster Loan as there will be no “credit elsewhere” test for small businesses. As such, one doesn’t have to provide evidence as to receive funding through sources that needs approval.
For those businesses that cannot opt for the loan includes the one engaging in lending, investments, gambling, and as so forth.
The applicants should be adversely affected by the ongoing covid situations.
Targeted EIDL Advances have different qualifications:
- Firstly, your income needs to be constituted in lower income community, demonstrating a 30% deduction in revenue, consisting 300 or lesser number of staffs. In case of Supplemental Targeted Advances, businesses need to have economic loss of 50% with 10 or less staff members working at hand.
- These organizations or 501©(19) that meet this employee number are eligible.
- Private non-profit organizations, self-employed/solopreneur persons, independent contractors, sole proprietorships, affected by the pandemic are eligible.
- There might be various industries having more than 500 employees. But, if they meet the SBA’s size standards they are under eligibility criteria.
- The EIDL advance funds will operate for successful application. The loan advance will not have to be repaid (up to $10,000).
How to Apply for an Economic Injury Disaster Loan(EIDL)
SBA EIDL Application
The SBA’s website is your first option to look forward for applying the COVID-19 EIDL program loan. As per the Small Business Administration estimation, the time to apply will be from over 2 hours with required field to finish the entire application sheet.
So, once you have submitted the SBA Economic Injury Disaster Loan Application form, you will:
- Receive a loan quote:SBA will tell you your qualifying standards. But it doesn’t say whether your loan has been approved. For that, you have to fill the amount that meets the maximization limits.
- Go through a final review: A final review is necessary where the officer will ask you to fill some extra info regarding your business prior to deciding whether to approve your application for EIDL.
In case you want to know more clear information regarding SBA EIDL Loan Application, and apply the other way, you can download the paper application, and mail it to the SBA. Further, you can contact the SBA service providers to receive the complete things related to disaster loan and EIDL application.
SBA have been spreading out looking for qualifying business owners. So, in case you wish for SBA EIDL Application for the Supplemental Targeted Advance or EIDL Advance, you can contact them. This will also let you be qualified for a greater amount as loan advancement in future.
The Bottom Line
There has been continuous time where federal government stretches the EIDL program in effect to COVID situation to an unprecedent heights. If you are not sure regarding which relief to opt and now currently prevailing, you can visit the SBA website anytime and take your loan process to the next level.
Need more information?
For more information about the EIDL and Targeted EIDL Advance programs, click here
For application status inquiries and/or questions about the loan program:
Please contact the SBA at 1-800-659-2955 (TTY: 1-800-877-8339) or [email protected].