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SBA – Economic Injury Disaster Loan (EIDL)

31 March 2020


  • Man-Li Lin – Economic Development Specialist U.S. Small Business Administration

Disaster Assistance for Small Businesses

On March 27th, 2020, Congress passed and the President signed the Coronavirus Aid, Relief, and economic Security (CARES) Act– a landmark $2 trillion stimulus package addressing the impact of COVID-19. This package includes substantially relief for small business, including:

  • Economic injury Disaster Loans and Grants (EIDL): an additional $10 billion in funding for SBA economic injury disaster loans, with emergency grant of op to $10000 to provide immediate relief for small business operating.
  • Paycheck protection program: A $350 billion loan program for small businesses and nonprofits to maintain existing workforce and help pay for other expenses like rent, mortgage and utilities.
  • Small business debt relief: $17 billion for the Small Business Administration (SBA) to cover 6 months of payments for small businesses existing SBA loans, including 7(a). Community Advantage, 504, and Microloan programs.

Paycheck Protection Program

Small businesses Loans

  • The paycheck protection program is a $350 billion loan program that applies to:
    • Small employers with 500 employees or fewer, as well as those that meet the current small business Administration ( SBA) size standards.
  • Self-employed individuals and “ gig economy” individuals: and certain nonprofits, including 501(c) (3) organizations and 501 (c)(19) veteran organizations, and tribal business concerns with under 500 employees.
  • Loan Amount: The size of the loans equal 250% of an employer´s average monthly payroll, up to a maximum loan amount of $10 million
  • Use of funds: – covered payroll costs include salary, wages and payment of cash tips ( up to an annual rate of pay of $100,000): employee group health care benefits, including insurance premiums: retirement contributions and covered leave.
  • Loans can also be used to pay interest payments on mortgage obligations, rent, utilities, and interest on other debt obligations previously incurred.

Costs, availability, express loans

  • Reduced costs: the cost of participation in the program is reduced for both borrowers and lenders by providing fee waivers, an automatic deferment of payments for one year, and no prepayment penalties.
  • Loans are to be made available immediately through more than 800 existing SBA – certified lenders , including banks, credit unions, and other financial institutions, and SBA would be required to streamline the process to bring additional lenders into the program
  • SBA Express loans. The Maximum loan amount for SBA Express Loans, has been increased from $350,000 to 1$ million. Express loans provide borrowers with revolving lines of credit for working capital purposes.

Small business Debt Relief

The small business debt relief program provides immediate relief to small businesses with non-disaster SBA loans, 7(a), 504, and microloans. The SBA will cover payment, including principal, interest and fees, for six months. This relief will also be available to new borrowers who take out loans within six months of the President signing the bill into law.

The Advanced Economic Injury Disaster Loans and Grants (EIDL)

On March 6, The U.S congress passed a COVID-19 preparedness and response supplemental funding bill that designed COVID-19 as a disaster under the Small Business Administration (SBA) and provided $20 million to support the SBA’s administration of loan subsidies to small businesses of up to 2$ million per loan. On march 27, Congress passed the CARES Act adding $10 billion to the loan program and waving or relaxing several loan eligibility requirements.

The CARES act provides additional assistance for small business owners, including the opportunity to receive up to $10,000 Advance on an economic injury disaster loan ( EIDL) for emergency capital. The SBA is updating the system to implement this provision for small businesses to request an EIDL in advance when they apply for the loan. This update will be made available in the next coming days. In the meantime, you can still apply for a full EIDL, but you will need to reapply for the advance EIDL when the system is updated.

SBA Economic Injury Disaster Loan (EIDL) Qualifications

  • Financially impacted as a direct result of the coronavirus (Covid-19) since Jan 31, 2020
  • You have to be a small business. Visit this link for the size standards: https://sba.gov/partners/contracting-officials/small-business-procurement/small-business-size-standards
  • Maximum size restrictions are
  • Manufacturing < 500 employees
  • Wholesaling < 100 employees
  • Retail / Service – Avg sales $4.5 M to $32.5 M
  • Construction – $14 M to $33.5 M
  • Private non-profit organizations of any size
  • Small agricultural cooperatives and small agricultural enterprises

Note that: for the qualifications of the size of your company they will count the 2019 numbers of your company.

Loan amount and use

  • Up to $2 million to help meet financial obligations and operating expenses which could have been met without the disaster.
  • May be used to pay: fixed debts, payroll expenses, accounts payable and other bulls that can’t be paid because of the disaster’s impact.
  • The amount should reflect six months of operating expenses
  • There is no obligation to accept the loan when it’s offered.
  • The loan is going to be on a first come, first served basis

Criteria for approval

  • You must show a credit history that is acceptable for the SBA
  • Business must exhibit the ability to repay the loan. Show that you were currently on your obligations as of Jan 31.
  • Eligibility: small business owners in all U.S. States and territories suffered working capital losses due to the declared disaster.

Interest rate

  • 75% for small businesses
  • 75% for private non-profit organizations

Term: long term repayment up to a maximum or 30 years

Collateral: EIDL loans over $25,000 require collateral. SBA will not decline a loan for lack of collateral, but requires borrowers to pledge of what is available.


If more funds are needed, you can submit supporting documents and request an increase. If less funds are needed, you can request a reduction. If the loan is denied you will be given up to six months to provide new information and write a reconsideration request.

The following items may be requested:

  • SBA Form 5: 2 pages of application
  • IRS form 4506: completed and signed tax information authorization completed and signed by each applicant (each principal owning 20% or more of the applicant’s business), each general partner of managing member, any owner who has greater than 50% ownership in an affiliate business)
  • Complete copies, including all schedules, of the most relevant Federal Income tax returns for the applicants business
  • SBA Form 413: personal financial statement completed, signed and dated by the applicant, each principal owning 20% or more of the applicant’s business and each general partner or managing member.
  • SBA Form 2202: schedule of liabilities listing all fixed debts.

For non profit organizations (except religious/charitable organizations) the following items must be submitted:

  • SBA Form 5: completed and signed
  • A complete copy of the organization’s most recent tax return or a copy of the organization’s IRS tax exempt certification and complete copies of the organization’s three most recent years “statements of Activities”.
  • SBA Form 2202: schedule of liabilities
  • IRS Form 4506-T: tax information authorization completed and signed for each applicant and for any affiliated entity. Affiliates include, but are not limited to, business parents, subsidiaries, and or/ other business with common ownership or management.

Applying SBA Disaster Loan ( EIDL)

For help with your application, you can reach out to SBA’S Disaster Customer Service Center at (800) 659 2955 or email disastercustomerservice@sba.gov. Additional information will be posted on the SBA New York District Office Webpage at www.sba.gov/ny

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