The U.S. Small Business Administration (SBA) announced that the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal has been reopened to all eligible applicants experiencing economic impacts due to COVID-19. The SBA stopped accepting new EIDL applications on April 15, 2020, after the initial funding provided in the CARES Act was depleted. In early May, new applications were accepted on a limited basis only from eligible farmers, ranchers and certain other agricultural businesses that were not eligible in the first round of funding, after an additional $50 billion was provided through the Paycheck Protection Program and Health Care Enhancement Act.
The EIDL program offers long-term, low interest assistance for small businesses or non-profit organizations. These loans can provide vital economic support to help alleviate temporary loss of revenue. EIDL assistance can be used to cover payroll and inventory, pay debt or fund other expenses. Additionally, the EIDL Advance will provide up to $10,000 ($1,000 per employee) of emergency economic relief to businesses that are currently experiencing temporary difficulties, and these emergency grants do not have to be repaid. (see related posts below)
“The SBA is strongly committed to working around the clock, providing dedicated emergency assistance to the small businesses and non-profits that are facing economic disruption due to the COVID-19 impact. With the reopening of the EIDL assistance and EIDL Advance application portal to all new applicants, additional small businesses and non-profits will be able to receive these long-term, low interest loans and emergency grants – reducing the economic impacts for their businesses, employees and communities they support,” said SBA Administrator Jovita Carranza.
EIDL Program Overview
- These loans may be used to pay debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact, and that are not already covered by a Paycheck Protection Program (PPP) loan.
- The interest rate is 3.75% for small businesses and 2.75% for non-profits.
- To keep payments affordable for small businesses, SBA offers loans with long repayment terms, up to a maximum of 30 years. Plus, the first payment is deferred for one year.
- In addition, small businesses and non-profits may request, as part of their loan application, an EIDL Advance of up to $10,000.
- The EIDL Advance is designed to provide emergency economic relief to businesses that are currently experiencing a temporary loss of revenue. This advance will not have to be repaid, and small businesses may receive an advance even if they are not approved for a loan.
- SBA’s EIDL and EIDL Advance are just one piece of the expanded focus of the federal government’s coordinated response.
According to the SBA release, to meet the unprecedented need, numerous improvements have been made to application and loan closing process, including deploying new technology and automated tools. Applicants should visit the SBA disaster assistance website at SBA.gov/Disaster for additional information.
The SBA is also assisting small businesses and non-profits with access to forgivable federal loans under the Paycheck Protection Program, which is currently accepting applications until June 30, 2020. (see related posts below)
- PPP Flexibility Act Signed Into Law
- SBA Offers Additional PPP Loan Forgiveness Information
- SBA’s EIDL Program Appears to Be in Deep Trouble
- Paycheck Protection Program Loans – Round 2
- Loans for Mid-Sized Businesses Under the CARES Act
- Comparing Small Business Relief Packages
- Economic Injury Disaster Loans (EIDL) Under the CARES Act
- Paycheck Protection Program Loans (PPP) Available Under the CARES Act