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The SBA Economic Injury Disaster Loan Program

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The following is a repost of an article that originally appeared on the Paychex Worx site. 

A happy woman standing in the doorway of a restaurant.
  • The Small Business Administration’s Economic Injury Disaster Loan Program is offering low-interest federal disaster loans for eligible businesses that have been negatively impacted by the coronavirus.
  • Up to $2 million is available in assistance, with interest rates ranging from 2.75%-3.75% depending on business type.
  • Businesses can apply now on the SBA’s website.

To watch the webinar visit:

The coronavirus’s economic impact cannot be overstated. Businesses have been greatly reducing their hours of operation or closing their doors entirely, asking workers to stay home in accordance with state and federal guidance, and losing money. The result is considerable financial strain that could continue for some time. To help prevent business failure in the U.S. as a result of the coronavirus (COVID-19), the Small Business Administration (SBA) is now offering assistance via the Economic Injury Disaster Loan Program (EIDL).

What is the SBA’s Economic Injury Disaster Loan Program?

The SBA’s EIDL program is offering low-interest federal disaster loans for working capital to small businesses (defined as those with 500 employees and under) suffering substantial economic injury as a result of the coronavirus.

Which businesses are eligible for the EIDL program?

Eligible businesses must be located in a federally declared disaster area and be able to prove economic injury that’s resulted in a shortfall in revenue, backdated to January 31. This will allow businesses to show their injury beginning in February or March.

Businesses with credit available elsewhere are not eligible for relief as part of the EIDL program. Certain types of entities, including religious institutions and businesses in the cannabis industry, are exempt from the program.

How much can businesses borrow as part of the program?

The SBA is offering up to $2 million in assistance to eligible businesses as part of its EIDL program. Loans may be used to pay fixed debts, payroll, accounts payable, and other bills that can’t be paid because of the coronavirus’ impact.

The SBA is offering loans 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. Currently, the SBA is offering the option to defer payments in the first year, although businesses that choose to do this should note that interest would accrue during this time.

What is the interest rate on loans under the EIDL program?

The interest rate on this loan is 3.75% for businesses without credit available elsewhere. The interest rate for non-profits is 2.75%.

How do you apply for the EIDL program?

The SBA has a 3-step application process, which businesses can take advantage of now:

  1. Applicants can check to see if they are in an eligible disaster area at: The SBA is currently working with each of the 50 governors to have their states added to this list, so check back regularly if your area isn’t currently listed.
  2. Businesses can then register and apply online at:
  3. Loan status can be checked at the same site where you registered. The turnaround time is generally less than 4 weeks, but this could vary, given current circumstances and expected high volume.

As part of the application, businesses are also required to submit IRS Form 4506, which will allow the SBA to access their tax returns. The SBA will also check the business’s credit, but it’s important to note that they aren’t looking for a spotless record. Instead, they’re looking for assurance that the business can afford to pay off the loan.

It’s highly recommended that businesses apply online, rather than using the paper form. Online processing will be faster, and allows the business to receive automated status updates.

If you experience any service issues, you can reach the SBA disaster assistance customer service center at: 1-800-659-2955 or via email:

Other small business funding options may be available

Capital is always critical to small businesses, but it might be more important now than ever before. Additional avenues for financial help may be available for your business, depending on your circumstances. Consider financial support via options such as a bank or credit union, family and friends, or elsewhere.

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