Economic Injury Disaster Loans (EIDL)
A second round of funding for PPP loans has been approved. Due to overwhelming demand, we anticipate that the second round of funds will also run out quickly. Apply through Lendio to be matched with an SBA lender. Lendio is not a lender, and an application submitted through Lendio does not guarantee you will receive a PPP loan.
Is an EIDL right for your business?
We’ll walk you through loan amounts, uses, and qualification requirements so you can see if the EIDL works for you.
Loan Use
An Economic Injury Disaster Loan (EIDL) can be used to support your business with working capital to cover day-to-day expenses.
Loan Amount
Small businesses can receive up to $2 million in support during an economic crisis.
Eligible Businesses
Primarily small businesses with fewer than 500 employees, as well as private nonprofit organizations, are eligible for EIDLs.
What is an Economic Injury Disaster Loan (EIDL)?
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.
How Can You Use an EIDL?
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:
- Payroll
- Accounts payable
- Providing paid sick leave to employees
- Matching increased costs to obtain materials
- Rent or mortgage payments
- Other obligatory payments that cannot be met due to revenue loss
How Much Can You Get with an EIDL?
Loan amounts for this disaster relief loan cap at $2 million. However, there are several other important details you should know.
- Interest rates for small businesses are 3.75% and 2.75% for nonprofit
- You can get terms up to 30 years
- If you need short-term relief, you can apply for an SBA EIDL advance of up to $10,000
Who Qualifies for an EIDL?
Even with the loosened restrictions, there are still specific requirements for EIDLs—especially in regards to coronavirus. You can be approved if you:
- Are a US business with fewer than 500 employees
- Operate as a sole proprietor or an independent contractor during the covered period (January 31, 2020, to December 31, 2020)
- Are a 501(c), 501(d), or 501(e) private nonprofit
- Can prove substantial economic injury caused by COVID-19
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.
But Wait, There’s More!
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!
Russell was great. He went above and beyond for us. He guided us through our options to help us secure the federal funding we needed. Russell answered all our questions via email very promptly, and remained polite and courteous at this uncertain time.
I highly recommend Russell at Lendio for your small business financing needs. Excellent customer service.
– James H.
