Guide to SBA’s Economic Injury Disaster Loan Program
The Coronavirus Aid, Relief, and Economic Security (CARES) Act expands the Small Business Administration’s long-standing Economic Injury Disaster Loan Program (EIDL). The EIDL program was created to assist businesses, renters, and homeowners located in regions affected by declared disasters.
As of April 27, 2020, an additional $50 billion has been allocated for EIDL loans and $10 billion has been allocated for emergency grants. However, the SBA has not begun to accept new applications.
- The law provides that applicants can request up to $10,000; however, it seems that the SBA may scale the advance based on the number of employees an applicant has. Based on reports, the SBA may provide $1,000 per employee for up to ten employees. However, SBA has not provided public guidance on how it will determine the amount of the advance. Please check back for updates.
- Businesses who applied for EIDL before April 1 are encouraged to reapply in order to be eligible for the advance.
- The U.S. Small Business Administration (SBA) has issued updated guidance that it will provide initial EIDL loan disbursements of up to $15,000, in addition to the advance of up the $10,000
Who is ELIGIBLE?
- In general, all of the following entities that have suffered substantial economic injury caused by a disaster provided they were in existence on January 31, 2020:
- Businesses with fewer than 500 employees
- Cooperatives, ESOPs, and tribal small businesses with fewer than 500 employees
- Sole proprietors
- Independent contractors
- Most private nonprofits
What are the LOAN PARAMETERS?
- The maximum EIDL is a $2 million working capital loan at a rate of 3.75% for businesses and 2.75% for non-profits with up to a 30-year term
- Payments on Coronavirus EIDL loans are deferred for one year
- Up to $200,000 can be approved without a personal guarantee
- Approval can be based on a credit score and no first-year tax returns are required
- Borrowers do not have to prove they could not get credit elsewhere
- No collateral is required for loans of $25,000 or less. For loans of more than $25,000, general security interest in business assets will be used for collateral instead of real estate
- The borrowers must allow the SBA to review its tax records
How can I access an EMERGENCY $10,000 GRANT?
- Eligible applicants for an EIDL can receive a $10,000 emergency grant within three days of application (through Dec. 31, 2020)
- There is no obligation to repay the grant. To receive the $10,000 emergency grant, it is not necessary to have an approved EIDL loan. However, if you are able to secure a PPP loan, the $10,000 grant will be subtracted from the forgiveness amount
NOTE: The Paycheck Protection Program (PPP) created by the CARES Act prohibits borrowers from taking out two loans for the same purpose. For more information on PPP loans, visit uschamber.com/sbloans
Hawaii Resources to Assist with Loan Applications:
Patsy Mink Women’s Business Development Center
Phone: (808) 695-2635
Hawai‘i Minority Business Development Agency
Phone: (808) 956-0850
Phone: (808) 547-2700
How do I APPLY?
Apply online at www.SBA.gov/disaster