Economic Injury Disaster Loans
What Is an Economic Injury Disaster Loan?
Economic Injury Disaster Loan (EIDL) is a financial assistance program provided by the U.S. Small Business Administration (SBA). This loan serves as a support system for small businesses and non-profit organizations facing substantial economic challenges due to a declared disaster.
The program offers up to $2 million in financial assistance depending on the extent of economic injury experienced. The interest rates cannot exceed 4%, as capped by the SBA.
Who Is Eligible For an Economic Injury Disaster Loan?
The eligibility criteria for an Economic Injury Disaster Loan (EIDL) are primarily extended to:
- Small businesses
- Small agricultural cooperatives
- Sole proprietors
- Independent contractors
- Private nonprofit organizations
The above entities must follow the below conditions to qualify for the EIDL program.
- Located in an officially declared disaster area.
- Suffered substantial economic injury due to the declared disaster.
- Applicants must demonstrate attempts to secure credit elsewhere without success.
- Prospective EIDL borrowers must submit their applications within nine months of the disaster declaration. However, some exceptions are also made by the SBA in certain circumstances, such as death, illness, mail disruptions, military service, relocation, and repair issues.
Advantages of Economic Injury Disaster Loans
Additional Details About Economic Injury Disaster Loans
| Loan Amounts | Interest Rates | Loan Terms | Additional Costs | Collateral Requirements | Additional Loan |
|---|---|---|---|---|---|
| Up to $2 million | Capped at 4% | Up to 30 years | No prepayment penalties or other fees | Required only for loans over $25,000 |
A business may qualify for both an EIDL and a physical disaster loan. The maximum combined loan amount is $2 million. A separate SBA Disaster Assistance program known as business physical disaster loans covers property damage. |
| Amount depends on the actual situation | Currently set at 3.75% for businesses | Exact term depends on the borrower's ability to repay | For $25,000 to $200,000: Collateral can be any assets with a value equal to or greater than the loan amount | ||
| Independent of property damage | 2.75% for nonprofits | Over $200,000: Collateral must be a primary residence |
Documents Required To Apply For an Economic Injury Disaster Loan
You need to submit the below documents depending on your business entity, loan amount, and other considerations.
- Tax returns and financial statements
- Business standing verification
- Board approval documentation
- Business licenses and permits
- Personal tax returns
- Schedule of liabilities
- Employer quarterly tax Form 941
Economic Injury Disaster Loans Application Process
1
Online Application Form:
To begin with the EIDL application, you are required to fill out the application form and provide us with your loan requirements.
2
Advisor Call:
Expect a call from one of our Financial Advisors who will discuss your qualifications, explore loan options customized to your needs, and guide you through the preparation phase for the loan application.
3
Loan Application Submission:
After all the necessary documents are prepared, our team handles the submission of your loan application to the selected lender. Throughout the process, our agents maintain regular communication with the lender and provide you with regular updates on the application status.
4
Loan Approval Confirmation:
We regularly collaborate with the lender to address additional requirements so the loan can be approved promptly.
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