Economic Injury Disaster Loans (EIDL): How to Get a COVID-19 Disaster Loan

The Economic Injury Disaster Loan program (EIDL) is part of the SBA Disaster Loan program. EIDLs have traditionally been available to businesses affected by natural disasters, such as hurricanes and floods. However, the SBA declared all U.S. states (and all counties within those states) and territories disaster areas due to the COVID-19 pandemic—essentially making all U.S. small businesses eligible to apply for these low-interest, long-term loans.

If your business has been economically impacted by COVID-19, you can apply for an EIDL of up to $500,000 directly from the SBA through Dec. 31, 2021. Additional EIDL grants of up to $15,000 may be available based on your business’s location and revenue lost.

The federal government has authorized several rounds of funding to the EIDL program to support small businesses affected by the pandemic. Here is where things stand as of this writing:

• The maximum EIDL is $500,000. Business owners were previously able to receive up to $2 million—the program’s regular maximum—as COVID-19 relief.
• The EIDL Advance program is no longer available. Applicants can no longer receive forgivable cash advances of up to $10,000 within three days of applying for an EIDL.
• Businesses in low-income communities can still receive grants. The Targeted EIDL Advance program offers eligible businesses up to $10,000 if they applied for an EIDL Advance and received less than that amount. Businesses with 10 or fewer employees that have been hit the hardest may get an additional $5,000 via the Supplemental Targeted Advance program, for a possible maximum EIDL grant of $15,000.

You can apply for a COVID-19 Economic Injury Disaster Loan directly on the SBA’s website. The SBA estimates it will take you a little over two hours to complete the application. After submitting your application, you will:

• Receive a loan quote. The SBA will let you know how much you qualify to receive—but this is not an approval. You will need to select a loan amount up to that maximum.
• Go through a final review. A loan officer may ask for additional information about your business before deciding whether or not you’re approved for an EIDL.

If you’d prefer, you can download a paper application and mail it to the SBA. Additionally, you can call the SBA Customer Service Center (800-659-2955) or send an email to disastercustomerservice@sba.gov to receive disaster loan information and an EIDL application.

If you’re interested in the Targeted EIDL Advance or Supplemental Targeted Advance programs, the SBA is directly reaching out to qualifying business owners. The SBA is also contacting business owners who previously received an EIDL loan but now qualify for a greater amount.

Eligible borrowers for a COVID-19 EIDL include:

• All SBA-qualified small businesses and cooperatives 500 or fewer employees
• Agricultural businesses with 500 or fewer employees
• Most private nonprofit organizations
• Independent contractors
• Sole proprietorships
• Faith-based organizations
• Tribal businesses

You will have to meet most standard SBA loan requirements to qualify, including meeting minimum credit standards. However, unlike other SBA loans, there will be no “credit elsewhere” test for small businesses that apply for a COVID-19 EIDL loan, meaning you do not need to prove you cannot receive funding through another source to be approved.

Businesses that are not eligible include those engaged in gambling, investing, and lending.

Targeted EIDL Advances have different qualifications: Your business must be in a low-income community, demonstrate a 30% reduction in revenue and have 300 or fewer employees. For Supplemental Targeted Advances, businesses must have an economic loss of 50% and 10 or fewer employees instead.

The exact amount of your EIDL will depend on how your business has been affected by COVID-19. That being said, here are general terms and rates for EIDLs:

• Loan amounts: Up to $500,000 for loans issued starting the week of April 6, 2021; if you received less than $500,000 for a loan issued before April 7, 2021, you can request additional funding up to that amount.
• Collateral: Required for loan amounts over $25,000
• Personal guarantee: Required for loan amounts over $200,000
• Interest rate: 3.75% for businesses, 2.75% for nonprofits
• Repayment terms: 30 years
• Deferment: Payments are automatically deferred 18 months or 24 months, depending on when you received the loan, but you can opt to make payments (interest does accrue during the deferral period)
• Uses: Working capital, inventory, equipment purchases, real estate payments, and other operating expenses (not intended to replace lost sales/profits or for business expansion)
• Forgivable: You must repay Economic Injury Disaster Loans; however, EIDL Advances are forgivable

The federal government continues to stretch the EIDL program due to COVID-19 to an unprecedented extent. If you’re unsure about what relief is currently available to your business, visit the SBA’s website to find local help.

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• State Resources for Businesses Impacted by COVID-19