The SBA Economic Injury Disaster Loan program (EIDL) is now available in all 50 states as well as U.S. territories, and businesses everywhere are eligible to apply. The EIDL program offers businesses low interest disaster loans up to $2 million to support working capital needs for small businesses suffering economic injury as a result of COVID-19. We’ve created this article to help streamline the information available on SBA disaster loan requirements and EIDL eligibility. New information is becoming available daily so we’re updating it in live time to make sure you have the most current information.
Please note that the SBA EIDL program is available directly through SBA and not Pursuit. Inquiries and applications are being managed by SBA (learn more in the “how to apply” section).
What is EIDL?
EIDL is a disaster loan program that provides small businesses negatively impacted by COVID-19 with low cost disaster funds. Here are the program basics?
- Amount: Up to $2 million, including affiliate loans. The amount of your loan will be determined by SBA’s assessment of your business’s losses due to the COVID-19 crisis.
- Interest rate: 3.75% fixed
- Term: 30 years
- Other facts: There is no prepayment penalty and there is a one year deferment on the loan (interest will still accrue during this period)
- Use of funds: EIDL loans can ONLY be used to alleviate economic injury as a result of the COVID-19 crisis. You can use the funds to pay fixed debts, payroll, accounts payable and other bills that you would have typically been able to pay had your business not been impacted by COVID-19. The funds from these loans cannot be used to replace lost sales, refinance long-term debt or to expand.
The EIDL program is open to a wide variety of businesses impacted by COVID-19, including hotels, recreational facilities, manufacturers, restaurants, retailers, professional services, health care providers and more.
Loans are available to small businesses (and most nonprofits) that are directly impacted by COVID-19, as well as those that offer services directly related to impacted businesses. Also, businesses that are likely to be harmed by general losses in their community are eligible.
In addition to this requirement, there are other EIDL eligibility requirements that a business must meet in order to qualify:
- In general, your business must be suffering economic losses due to COVID-19, and COVID-19 only. If your business was struggling to make ends meet before the COVID-19 crisis, it’s not likely that you’ll qualify for this program.
- Your personal credit history must be fair-to-good.
- You must be able to demonstrate and ability to repay the loan.
- Collateral is required for all loans over $25,000. If real estate is available, it must be pledged as collateral. If you truly do not have collateral to pledge, you will not be declined. However, you are required to pledge what collateral you do have available.
How to apply for an SBA disaster loan & EIDL
There are two ways to apply for the SBA EIDL program: through SBA’s online application or by mail. Whichever you choose, help is available through SBA at 1-800-659-2955 or [email protected]. Be prepared for long hold times and delays in reply due to the high volume of applications.
The online application for EIDL is available at disasterloan.sba.gov/ela/.
Be aware of scams; this is the only accurate link to apply for this program.
Apply by mail
You may find it more convenient to apply by mail if you’re unable to access the SBA site.
To apply by mail, download the application forms and mail them using an overnight service to:
U.S. Small Business Administration
Processing and Disbursement Center
14925 Kingsport Road
Fort Worth, TX 76155
EIDL application tips and advice
- Be sure to review the SBA disaster loan requirements and application in its entirety and double check that it’s complete before submitting. The SBA has warned that incomplete applications will not be processed. If you submit an incomplete application, you’ll be alerted but moved to the back of the processing queue.
- Apply for EIDL as soon as you can – hundreds of thousands of business owners will be applying in the months to come (applications are open until December). You don’t have to take the loan if you’re approved. This gives you the flexibility to get your application at the front of the queue while waiting to see what other options become available over the next several weeks.
- Contact local business agencies for support with the application. Some Small Business Development Centers (SBDCs) and Women’s Business Centers (WBCs) are providing help with applications or will be doing so in the coming weeks.