Economic Injury Disaster Loans
One of the federal government responses to the Coronavirus pandemic was to create a program where small businesses could apply for Economic Injury Disaster Loans (EIDLs). This program was meant to provide temporary economic relief for businesses impacted by the pandemic. They were low-interest loans for businesses and non-profits with a 30-year term and no pre-payment penalties or fees that were designed to cover operating expenses and other financial obligations during that time period.
In addition to the EIDL Loan, there was also an EIDL advance, but all advance funds have been fully allocated. The EIDL Advance did not require capital to secure them, the EIDL itself required collateral. In addition to a 30-year term, borrowers could also defer payments for up to a year, but interest would accrue during that time period.
You Can Still Apply!
The Small Business Administration (SBA) is still accepting new EIDL applications from qualified businesses, which includes private nonprofits and agricultural businesses in all U.S. states and territories as well as the District of Columbia.
You can apply for an EIDL at the SBA’s portal. The online application asks for all of the necessary information to process your loan application. It is a self-certifying application. What that means is the SBA is expediting loans by waiving some of the proof requirements that might apply to other SBA loans and is relying upon businesses to determine whether the applicants are eligible for the loan. Once they have the requested information, the SBA then determines whether or not your business has or is likely to suffer an economic injury due to the COVID-19 pandemic. If your business is vulnerable and there are funds left to lend, then you may be offered a loan. The EIDL is a loan and must be repaid. While some relief programs may change obligations under this program, borrowers should not access these funds without repayment plans.