These instructions will walk you through the application procedure for a low-interest small business loan if your company is struggling after a calamity.
Through numerous key modifications being implemented as part of the US Small Business Administration’s (SBA) COVID Economic Injury Disaster Loan (EIDL) program, the hard-hit small business sector will now be eligible for much-needed extra financial assistance. Applications for loans with borrowing limits of up to $2 million are now open, up from the previous restriction of $500,000.
Repayments can now be postponed for up to 24 months from the day the loan was issued as part of the loan upgrades. A 30-day exclusivity period will be announced during which loans of $500,000 or less will be reviewed, approved, and distributed, allowing for easier and faster access to a share of the estimated $150 billion in funds available for capital and operating expenses such as payroll, equipment purchases, and debt repayment.
Note these changes apply to EIDL loans for COVID relief only. They do not apply to EIDL loans received for other natural disasters.
Funds can be used to pay invoices and fixed debts, as well as wages and accounts payable. The money can’t be used to make up for lost sales, develop your company, or pay off long-term debt.
You cannot use the loan to pay:
- Dividends and bonuses
- Disbursements to owners (unless for the performance of services)
- Repayment of stockholder/principal loans
- Expansion of facilities or purchasing fixed assets
- Paying off debt owned by a Federal agency or SBA
- Paying any direct Federal debt, except IRS obligations
- Refinancing long-term debts
How to know if you are eligible for EIDL Loan?
To be eligible for an SBA loan, you must be a small business with less than 500 employees, as defined by the SBA. For certain sectors, there are certain exceptions. You can use the SBA’s Size Standards Tool to see whether your company qualifies.
Small companies of any size are eligible for an EIDL if they are located in a declared disaster zone. An up-to-date list of COVID-19 declared disaster zones may be found here. All 50 states are now eligible for disaster relief as of this writing.
How to apply for SBA Economic Injury Disaster Loan?
Step 1: Find your declared disaster location on the SBA disaster loan website.
The SBA’s disaster loan assistance page provides an overview of the loan application and how eligible businesses can use the funds.
Step 2: Create your account and verify your identification
To apply for the loan securely, you’ll need to create a Login.gov account, where you’ll need to authenticate your identity using the following:
- A state-issued identification card.
- Social Security Number
- To obtain a verification code, you’ll need a phone number from a phone plan connected with your name.
Step 3: Complete the application
You will need several things like the ones mentioned below to complete your application process:
- Legal name of the business
- Your Federal EIN number or Social security # (SSN)
- Date of establishment
- Number of human resources
- Total amount of lost rents due to COVID-19 (for rental and commercial property owners only)
- Bank Name
- A/c number
- Routing Number
Occams brings you a wide experience of industry experts. You should always consult a business expert before making any decisions and we suggest you do the same. You can check out and know how Occams can help you with your EIDL requirements. Click here to know more.
” This blog offers generic information. By no means, it is professional advice. The information aforementioned is believed to be factually correct. The information provided is solely based on the author’s judgment and is subject to change. This is not endorsed by any 3rd parties or other brands.”