SBA Economic Injury Disaster Loan (EIDL)

April 27th, 2020 Update: The U.S. Small Business Administration’s Paycheck Protection Program has re-opened applications, we anticipate the money will go fast. Click here for new updates and tips for making a strong application.

The U.S. Small Business Administration is committed to help bring relief to small businesses and nonprofit organizations suffering because of the Coronavirus (COVID-19) pandemic. On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which provides additional assistance for small business owners and non-profits.

Included in the CARES Act is the opportunity for small business owners to apply for an Economic Injury Disaster Loan advance of up to $10,000.

• These grants provide an emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19 within three days of applying for an SBA Economic Injury Disaster Loan (EIDL).
• To access the $10,000 advance, you must first apply for an EIDL and then request the advance.
• The advance does not need to be repaid under any circumstance, and may be used to keep employees on payroll, to pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments.
• The EIDL Grant and Loan Program is administered through the Federal Government
• An alternative payroll assistance program is available through the SBA 7A Loan Program, known as the “Paycheck Protection Program” is administered through local lenders. The Paycheck Protection Program is specifically designed to help small businesses keep their workforce employed. It is important to know which program is best for you, and not let that decision delay application of EIDL.
• The $10,000 Grant Advance may be available even if your EIDL application was declined or is still pending.
• Funds will be made available within three days of a successful application, and this loan advance will not have to be repaid.

The $10,000 Grant Advance is Part of the EIDL Program

The Small Business Administration’s (SBA) Economic Injury Disaster Loans (EIDLs) are the first line of support for a national or local crisis.  These loans aren’t new. They have always been available in the event of disaster. However, this is the first time a virus or pandemic event has been defined as a disaster. So if things seem a little overwhelming and confusing right now, you’re not alone.  Even if you’re well-prepared with a three- to six-month buffer for your business, you still need to plan for what happens if that runs out.

The SBA offers many favorable terms in their EIDLs:

• EIDLs offer up to $2 million in loan assistance and can provide vital economic support to small businesses to help overcome the temporary loss of revenue.
• These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact.
• The interest rate is 3.75% for small businesses (2.75% for non-profits) with long-term repayments to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.

If You Have Already Applied

The EIDL was available in Salt Lake City on March 17^th. Since then, several businesses applied.

Important Update as of Monday March 30, 2020: The SBA changed the online procedure for applying for an Economic Injury Disaster Loan. If you have already applied, and in order to qualify for the $10,000 Advance, you must submit this new application even if you previously submitted an EIDL application. Applying for the Advance will not impact the status or slow your existing EIDL application.

Customer Service

If you have questions about your individual situation or application:

NATIONAL HELP:

• Call SBA Disaster Assistance at 1-800-659-2955. (TTY: 1-800-877-8339) or e-mail disastercustomerservice@sba.gov. The call center is currently open Monday–Sunday, 8a.m. – 8p.m. EST.  Visit SBA.gov/disaster for more information.

LOCAL HELP:

• SBA Utah Office: If you are having trouble getting through, utahgeneral@sba.gov or call the local Utah SBA Office 801-524-3209.
• Salt Lake County Business Relief Hotline 385-468-4011
• Resource partners Utah Small Business Development Center,  SCORE Utah, Suazo Center and Women’s Business Center of Utah can help as well.

More Financial Resources Are Available

In addition to the SBA Economic Injury Disaster Loan (EIDL), we encourage you to check out other resources including:

• Salt Lake City’s Emergency Loan Program – meant to bridge the gap for what may be a shortened financial hardship period.
• Utah’s Small Business Bridge Loan – also a bridge for a shortened financial hardship period.
• SBA 7(a) loans through the stimulus program, funded through local lenders  – also known as the “Paycheck Protection Program” If you maintain your workforce, SBA will forgive the portion of the loan proceeds that are used to cover the first 8 weeks of payroll and certain other expenses following loan origination.
• Non-government loans and financing

FAQ (Frequently Asked Questions):

I’m not sure which SBA program is best for my company. Should I wait to apply?

• No. It is free to apply for the EIDL. So even if you have already applied for the EIDL and later think the 7A loan is a better fit, there is no obligation to take the EIDL.
• If you are looking for a quick infusion of a smaller amount of cash to cover you right now, the EIDL program may be the answer. Apply ASAP.

Can I apply for both EIDL and the Paycheck Protection Program?

• Yes. You can apply for both types of loans, as long as they cover different expenses (not a duplicative purpose). This is also true if you’re pursuing other local or regional government assistance.

Can I qualify for a Paycheck Protection Program loan if I previously applied for an EIDL?

• Businesses can be eligible to receive both EIDL and PPP loans if the loans are for different expenses. Refinancing options are also available if a business already has an EIDL loan.

Where can I find more help understanding the difference between the EIDL Program and the Paycheck Protection Program?

• Many local Salt Lake City webinars are happening soon.
• Contact the customer service resources listed above for answers.