Update May 6, 2022: EIDL loan funds have been exhausted. At this time, you are unable to request loans or loan increases, but you can continue reading to learn more about the program in case a similar situation arises in the future.
The COVID-19 pandemic hit the small business community hard. There is still a long way to go before the US returns to any semblance of normalcy, and even though vaccine distribution is currently under way, so many small business owners are looking for additional financial support to weather the storm and keep their enterprises operating.
Although the Paycheck Protection Program (PPP) has been a popular choice, PPP loans can only be used to pay for approved non-payroll costs and payroll expenses, and those limitations don’t apply to all businesses.
That’s where Economic Injury Disaster Loans (EIDL) come in. In 2020, the EIDL program approved over 3. 6 million EIDL loans totaling $195 billion in disaster aid were given to small businesses nationwide.
What exactly is the EIDL program, how will it be implemented in 2021, and how can small businesses use it to access the funding they require to deal with the ongoing coronavirus crisis?
What are EIDL loans?
The EIDL program is a fund for disaster relief that is managed by the U S. Small Business Administration (SBA). As a result of a declared disaster, such as the COVID-19 pandemic, the SBA Economic Injury Disaster Loan program offers emergency loans to small businesses experiencing financial hardship and difficulties.
EIDL loans are not forgiven, in contrast to PPP loans; borrowers must pay back the full loan amount plus interest. However, one significant benefit for companies seeking funding is that EIDL loans provide much more favorable terms than conventional loan options.
Currently, Economic Injury Disaster Loans offer a 3. 75 percent fixed interest rate (even lower for nonprofits and non-profits at 2 75 percent), a repayment period of 30 years, a payment deferral period of 30 months, and no fees or penalties for early repayment
Loan proceeds can be used to cover working capital and normal operating expenses, including payroll, purchasing equipment and all forms of debt, with a maximum loan amount of $2 million. If your business has already received a loan via COVID EIDL, youre likely eligible for an increase and can request one via the SBA portal.
Note: As of September 1, the maximum loan amount rose from $500,000 to $2 million. Businesses must wait until after October 8, 2021. 8 to learn if they have been granted anything over $500,000 As part of the SBA’s efforts to make sure small businesses have access to these funds, your application will be processed as soon as possible for companies seeking loans under $500,000.
In order to qualify for an EIDL loan, businesses must meet the following eligibility criteria:
What is a Targeted EIDL Advance?
If youre in a low-income community, you might be eligible to receive up to $15,000 in additional funds from the SBA that dont need to be repaid through the Targeted EIDL Advance and Supplemental Targeted Advance programs.
These loan advances can be compared to grants, but without the typical requirements that come with grants from the federal government. Apply for a COVID-19 Economic Injury Disaster Loan first to receive these advance funds (we’ll cover that below). To receive an advance, you don’t have to accept the loan or be approved. If your company qualifies, the SBA will invite you to submit an application. Additionally, you might be eligible for both of these advances depending on the size of your company and the losses you sustained.
The Targeted EIDL Advance program provides assistance of up to $10,000. Eligibility requirements include:
Meanwhile, the Supplemental Targeted Advance offers $5,000 in aid. Eligibility requirements include:
What’s the current status of EIDL? Is the program currently accepting applications?
Now that you are familiar with EIDL loans, let’s discuss where the program stands right now.
The EIDL is currently accepting fresh loan requests and approving them. Until December 2021, the SBA intends to continue accepting new EIDL applications (pending the availability of funds).
What is the application process for EIDL loans?
You’ll need to know where to begin if you’re considering applying for an EIDL loan; fortunately, the loan assistance application procedure is reasonably streamlined and simple.
Small businesses interested in applying for an EIDL loan can apply directly through SBA.gov. According to the SBA’s EIDL Application Checklist, in order to apply for an EIDL loan, you’ll need to submit
You’ll get a loan quote after submitting an application via the SBA portal. It’s important to remember that the quote is NOT an approval and may not accurately represent the amount of your EIDL loan. Your qualified loan amount is estimated by the loan quote; you may apply for any loan amount up to the maximum amount indicated by the loan quote.
After you confirm the loan amount, the loan officer receives your application for review. Before accepting or rejecting your loan application, the loan officer may need more details (such as a current balance sheet or profit-and-loss report).
You will receive an email once the loan officer approves it informing you whether your loan was approved or denied. The email will contain instructions on how to sign your loan documents and get your funds if your loan was approved. The email will specify the reason(s) for the denial if your loan application was denied.
How long does it take for EIDL applications to be processed?
How long will it take to process my application for a Covid-19 EIDL loan? is one of the main queries borrowers have.
And, unfortunately, that question doesn’t have a one-size-fits-all answer.
Depending on the volume of applications, it may take a few days to a few weeks to process your EIDL application; however, new applications are typically processed within 21 days. And the SBA will move forward with loan disbursement pretty quickly if your loan is approved; loan proceeds should arrive in your bank account in 5 to 10 business days.
How can I check EIDL loan status?
The waiting period while your application is being processed is one of the most difficult aspects of applying for an SBA disaster loan. Fortunately, there are several ways to determine the status of your application.
Online: https://disasterloanassistance.sba.gov or via the SBA portal
By phone: SBA Disaster Assistance Customer Service Center (Monday through Sunday, 8 a.m. to 8 p.m. ET), 1-800-659-2955 (TTY/TDD: 1-800-877-8339).
Visit the SBA portal or dial the above customer service number to find out the status of your Targeted EIDL Advance application and/or Supplemental Targeted Advance application. You can also email TargetedAdvance@sba. gov.
You may be required to submit supporting documentation depending on how you check the status of your loan (for instance, if you use the SBA portal, you’ll need your username and password; whereas, if you email to check the status of your application, you’ll need to submit your full legal name, application number, and possibly additional supporting documentation, such as your federal tax ID).
What happens if my EIDL loan is declined?
You must have the money if you are applying for an EIDL loan, and it can be very demoralizing if your application is denied.
For a number of reasons, including credit history, incomplete or unverifiable information, or ineligible business activity, EIDL loans are rejected. There are still other ways to obtain the funding you require to keep your business operating if your loan application is rejected, including the following:
If your application for an EIDL loan is rejected, you have up to six months to ask for a reconsideration, either by email (to pdcrecons@sba gov) or mail (by sending a request to U. S. Disaster Assistance Processing and Disbursement Center for the Small Business Administration, 14925 Kingsport Road, Fort Worth, Texas 76155.
Can I still apply for a loan through the Paycheck Protection Program
The Paycheck Protection Program is no longer accepting new applications. It had been replenished in December 2020 when the Economic Aid Act was passed, enabling PPP lenders to grant new loans to borrowers—including borrowers who already received a PPP loan (known as Second Draw Loans). The program, however, ended May 31, 2021.
If you received a PPP loan and intend to apply for loan forgiveness, you may do so starting the day after the end of your covered period and for the ensuing ten months. For people who applied early on in the program (i. e. Your application for forgiveness had to be submitted by some point in mid-July 2021 (for a covered period of eight weeks beginning in April 2020). You’ll be liable for monthly interest and principal payments if you don’t apply in a timely manner.
Get the funding you need to keep your business moving forward through COVID
There is no doubt that COVID is posing significant difficulties for small businesses. However, now that you are more knowledgeable about the Economic Injury Disaster Loan program (including how to apply for a low-interest loan and check the status of your application), you have the knowledge necessary to submit an application—and, hopefully, secure the funding you require to maintain the operation of your business throughout the pandemic.
FAQ
Can I check my SBA loan status online?
The SBA Capital Access Financial System (CAFS) (caweb) is available to current borrowers. sba. gov) to keep track of the following loan categories: Paycheck Protection Program (PPP), all SBA disaster loans, including COVID-19 EIDL and physical loss loans.
How will I know if my SBA loan is approved?
The SBA will email you the loan details if your loan is approved. If you haven’t received an email and want to find out the status of your application, get in touch with the SBA directly. You might also be able to check the status of your application online or by getting in touch with your loan officer, depending on your lender.
How long does it take to get SBA loan after approval?
For its express loans, the SBA promises a turnaround time of 36 hours. But that does not account for the time needed for the lender to approve the loan, which may add a few more weeks to the process. So, after everything is said and done, you can expect the SBA loan processing time to take 30 to 60 days rather than 60 to 90 days.
How do I find my SBA loan information?
Borrowers of COVID-19 EIDL without a CAFS account, locate your loan number on a statement or letter from the SBA. It is NOT the same as your application number. Please call the SBA COVID-19 EIDL Customer Service Center at 833-853-5638 if you don’t have a letter or statement.