The Economic Injury Disaster Loan (EIDL) Program: What You Need to Know
Back of the Napkin episode 17 features another SurePayroll Mainstream Minute featuring Holly Wade, Executive Director of the National Federation of Independent Business (NFIB), In this episode, Wade discusses the Economic Injury Disaster Loan program for small business owners. Listen to the episode.
The last few years for small business owners have been interesting, a fact not lost on the Small Business Administration (SBA).
The SBA offers a variety of COVID-19 relief options for small business owners, according to Holly Wade, Executive Director of the National Federation of Independent Business. One option, EIDL Advance Programs, target the hardest hit businesses and private nonprofits and does not require repayment of funds. Another option, the COVID-19 EIDL, is a loan that provides economic relief to small businesses and nonprofit organizations currently experiencing a temporary loss of revenue.
The EIDL offers low interest, long term loans to small business owners recovering from the pandemic. This loan program is available until the end of this year for businesses that need financial support.
“This loan program is a great opportunity for small businesses recovering from the pandemic that need some additional financial support now that the PPP loan program is closed. This loan program is available until the end of this year,” said Wade.
Wade notes that borrowers can receive up to $500,000 for a 30-year term loan at a fixed, 3.75% interest rate. “The loan amount is based on the business’s reported gross profits. The SBA is also providing borrowers with a longer first payment deferment period. For all SBA disaster loans made in 2020, the first payment due date is 24 months from the date of the note. And for SBA disaster loans made in 2021, the first payment due date is 18 months, from the date of the note,” said Wade.
As expected, there are restrictions for what the money can and can NOT be used. “The loan can be used for normal operating expenses,” said Wade. “Including payroll, inventory, rent, utilities, and fixed debt payments.”
EIDL applicants are also eligible to receive an EIDL grant of up to $10,000 per business. Wade suggests business owners visit the SBA website to learn more about the loan program, access the application portal, and apply for a EIDL loan or request an EIDL grant.
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