Economic Injury Disaster Loan Program Through the SBA

Any business with up to 500 employees is eligible for an Economic Injury Disaster Loan (“EIDL”). Similar eligibility criteria as applicable to PPP Loans apply, e.g., businesses with up to 500 employees, independent contractors and sole proprietors are also eligible.

In response to COVID-19, the SBA has relaxed some of the requirements typically applicable to EIDL loans. If the loan is $25,000 or less, the SBA will not require the borrower to pledge collateral. Similarly, so long as the business was in operation as of January 31, 2020, the requirement that the business be operational for one year prior to the disaster will be waived. Notably, the personal guaranty requirement for loans of up to $200,000 is also waived.

  • What the Program Offers:
    • The Small Business Administration (SBA) coordinates with lenders to obtain and provide small business loans to eligible businesses.
    • Available to small businesses, cooperatives, ESOP’s, individual contractors, sole proprietors, tribal businesses, and private non-profits with less than 500 employees.
    • Interest Rate of just 3.7% for small businesses.
    • Terms are available up to 30 years, determined on a case-by-case basis based upon each borrower’s ability to repay.
  • General Factors for Eligibility:
    • Type of business
    • Structure of ownership of the business
    • Location of business operations
    • Size
    • Financial ability to repay
    • Physically located and operates in the U.S. or its territories
    • Business owners have invested their own time or money into the business
  • Permitted Uses of EIDL Funds. When the SBA approves an EIDL, the loan approval specifies the permitted use of loan proceeds. Generally speaking, the loan proceeds may be used to pay any financial obligations and operating expenses that would have been met had the disaster not occurred.
  • Loan Forgiveness?
    • No. Unlike the Paycheck Protection Program Loan, there is no loan forgiveness for an EIDL. However, repayment is not required for up to $10,000 in the form of an Emergency EIDL Grant.
  • To Apply: Disaster Assistance

For more information, please contact:

Ramsay M. Whitworth
Mark Edelson
Steve Leitess
Ilona Shparaga
Michael J. Levin

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