Update on the SBA’s Economic Injury Disaster Loans (EIDL)

Posted on June 03, 2020

With much of the news surrounding the CARES Act focused on the potentially forgivable loans under the paycheck protection program (PPP), many small businesses may have forgotten that financial relief may also be available through the SBA’s existing Economic Injury Disaster Loan (EIDL) program.

The SBA expanded its EIDL program in response to the COVID-19 health crisis, providing small businesses and nonprofits with easier access to low-interest loans of up to $2 million with repayment terms of up to 30 years. Not only does the program relax loan applicants’ credit requirements, it also offers them immediate emergency grants of up to $10,000 regardless of whether they actual receive loan approval. While these grants do not need to be repaid, recipients who also secure PPP loans will have the amount of their grants subtracted from the forgiven portion of their PPP loans.

According to the SBA, more than 252,000 EIDLs representing nearly $25 billion have been approved as of May 17. However, like the launch of the PPP, the EIDL program has been plagued by a series of challenges, including a closure of the application process, significant processing delays and a maze of changing rules and restrictions. At the current time, the SBA is only processing the backlog of EIDLs and EIDL Advance applications it received before April 15 and limiting its pool of new applicants solely to agricultural businesses.