EIDL Update 2020-05-07:
The SBA is still extremely backlogged in processing EIDL applications. Here are some updates:
- No new applications are being accepted except from farming and agricultural organizations
- We don’t have data about how many organizations have received funding or how much funding is left.
- Loan values offered through EIDL have unofficially been reduced to a maximum of $150K per anonymous SBA sources
- Loans should be offered on a first-in, first-out basis, but farming and agricultural organizations may be receiving preference.
- Over 4 million applications have been submitted, with less than $70 billion in funding made available.
- SBA Press Release: https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/sba-make-economic-injury-disaster-loans-available-us-agricultural-businesses-impacted-covid-19
- Washington Post findings: https://www.washingtonpost.com/business/2020/05/07/sba-disaster-loans/
For more on the EIDL program, continue reading below.
In light of losses suffered due to the impact of COVID-19, businesses may apply for special loans from the Small Business Administration (SBA) under its Economic Impact Disaster Loan program (EIDL). With all the information floating around for companies about this program, we wanted to share what we feel is most important for you to know about EIDL so you can hit the ground running.
Please know that EIDL applications are handled directly by the SBA, and with the current circumstances the SBA is working to get through applications quickly but will likely have a response time closer to 10 or 15 business days rather than 2 or 3 business days.
Lastly, please know that if you plan to file for relief through the Paycheck Protection Program (PPP) signed into law on March 27, 2020 through the CARES Act, you can get assistance through the PPP and through the EIDL for COVID-19 relief, but the use of the money must be different.
If you’d like free help applying for this loan, click here. Our gurus are waiting to help you.
Enough chit-chat though—here are the EIDL details mapped out for you.
The EIDL can provide up to $2 million in loan financing to a small business in a presidentially declared disaster area (the whole U.S.)
- Your business was in operation by or before January 31, 2020
- Your business must meet the definition of a small business
- Your business must show you cannot pay your necessary operating expenses and obligations as a direct result of COVID-19
Credit Requirements for Eligibility
- Credit History – Applicants must have a credit history acceptable to SBA
- Repayment – Applicants must show the ability to repay the loan
- Collateral – Collateral is required for all EIDL loans over $25,000. SBA takes real estate as collateral when it is available. SBA will not decline a loan for lack of collateral, but SBA will require the borrower to pledge collateral that is available
- Loan amount will correlate with the loss suffered, up to a maximum amount of $2 million
- Interest rates will be 3.75% or less
- Repayment term will be set on a case-by-case basis for a maximum of up to 30 years
- No loan fees or prepayment fees are set.
Information to Gather
- General Business Information including Name, Tax ID, Address, # of Employees, Ownership info, and other applicant business information
- Gross Revenues for the 12 months prior to the date of the disaster (January 31, 2020)
- Cost of Goods Sold for the 12 months prior to the date of the disaster
What to Do Next
- Visit https://covid19relief.sba.gov/#/ and complete the EIDL request form
- Prepare the following for next steps in the EIDL process
- Tax information authorization (IRE Form 4506T) for the applicant(s)
- Six months history of company’s income and expenses
- Three to six months projection of income and expenses, to show the expected loss
- A personal financial statement
- Be prepared to respond to the SBA with these and other EIDL information requests as soon as they arrive
- An SBA fact sheet for your region may be found here: https://disasterloan.sba.gov/ela/Declarations/Index
If you’ve made it this far through, please note that we seek to keep this information accurate and up-to-date but recognize that continually changing circumstances mean new information might not yet be reflected here. Please reach out to us with any questions you may have or if you are interested in assistance through the loan process, and we will be happy to share the ways we can help.