The Economic Injury Disaster Loan
Emailed on April 3rd 2020 in The Friday Forward
The CARES Act also expanded the Small Business Administration’s long-standing Economic Injury Disaster Loan Program (EIDL). The EIDL program was created to assist businesses, renters, and homeowners located in regions affected by declared disasters.
This is an additional resource worth exploring for business owners. Here are the highlights:
The maximum EIDL is a $2 million working capital loan at a rate of 3.75% for businesses and 2.75% for non-profits with up to a 30-year term
Payments on Coronavirus EIDL loans are deferred for one year
Up to $200,000 can be approved without a personal guarantee
Approval can be based on a credit score and no first-year tax returns are required
No collateral is required for loans of $25,000 or less. For loans of more than $25,000, general security interest in business assets will be used for collateral instead of real estate
Eligible applicants for an EIDL can receive a $10,000 emergency grant within three days of application (through Dec. 31, 2020)
There is no obligation to repay the grant. To receive the $10,000 emergency grant, it is not necessary to have an approved EIDL loan. However, if you are able to secure a PPP loan, the $10,000 grant will be subtracted from the forgiveness amount
I hesitate to call this a catch, but an important note: The Paycheck Protection Program (PPP) created by the CARES Act prohibits borrowers from taking out two loans for the same purpose, so make sure you have a clear use of funds when applying for your EIDL loan.
Apply for the EIDL here: https://www.sba.gov/funding-programs/disaster-assistance
