We’ll walk you through loan amounts, uses, and qualification requirements so you can see if the EIDL works for you.
An Economic Injury Disaster Loan (EIDL) can be used to support your business with working capital to cover day-to-day expenses.
Small businesses can receive up to $2 million in support during an economic crisis.
Primarily small businesses with fewer than 500 employees, as well as private nonprofit organizations, are eligible for EIDLs.
An Economic Injury Disaster Loan is a traditional SBA loan reserved for disaster relief. While generally known for strict requirements and long wait times before receiving funds, much of that has shifted in response to the CARES Act and coronavirus (COVID-19) pandemic. The qualifications for these loans have expanded, and businesses can now receive a loan advance for up to $10,000.
These loans offer support for small businesses and help them stay operational during disaster-induced hardship. Use these funds to cover necessary day-to-day expenses your business would have successfully covered before coronavirus or other disasters impacted your finances. Examples include:
Loan amounts for this disaster relief loan cap at $2 million. However, there are several other important details you should know.
Even with the loosened restrictions, there are still specific requirements for EIDLs—especially in regards to coronavirus. You can be approved if you:
The SBA requires you to prove your business has suffered as a direct result of coronavirus. If your business was experiencing financial hardship before the pandemic, you likely won’t qualify.
In addition to your standard EIDL, the SBA and US Treasury have upped their game and now offer the Emergency Economic Injury Grant (EEIG) and Paycheck Protection Program (PPP). These new, potentially forgivable loan additions can provide your small business with the funds needed to keep you afloat and your employees paid!
– James H.
Mar 30, 2020