Key Highlights
- Economic Injury Disaster Loans (EIDL) available for small businesses and most non-profits in declared disaster zones
- EIDLs available for “typical” small businesses that make maximum of $1750,000 – $38.5M in annual revenue and has fewer than 100 – 1,500 employees depending on industry
- Small Business Interruption Loans to provide 100% guarantee on any qualifying small business interruption loan
Economic Injury Disaster Loans (EIDL) are now available in declared disaster areas. Currently, these areas include…
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- Georgia
- New Mexico
- Arizona
- Colorado
- Texas
- Utah
- California
- Washington state
- Idaho
- Oregon
- Maine
- New Hampshire
- Connecticut
- Massachusetts
- New York
- Rhode Island
- Nevada
- District of Columbia
- Virginia
- Maryland
- Wyoming
This list will grow as the COVID-19 spreads to other areas.
Actual economic injury will determine the size of the loans. Loans can be worth up to $2M with interest rates of 3.75% for small businesses and 2.75% for non-profits. Loans are long-term, up to 30 years.
The SBA is set to determine which businesses/non-profits will be considered to be creditworthy. Loans exceeding $25,000 must be secured by collateral and if the business has not collateral, assets of the business owners may need to be pledged instead.
Funds may be used for:
- Pay fixed debts
- Payroll
- Accounts payable
- Employee sick leave
- Other bills incurred due to the COVID-19 impact
Funds may NOT be used for:
- Refinance debts incurred prior to impact of COVID-19
- Payments on other loans owned by either the SBA or some other federal agency
- Tax Penalties or non-tax-criminal/civil fines
- Repair physical damage
- Dividends or other disbursements to owners/partners EXCEPT related to their services performance for the business
Small Business Interruption Loans
The qualifying loan terms for this program include employers with 500 employees or less.
The maximum loan amount is $10M for payroll, mortgage payments, rent payments and other debt during the one-year period before the date that the loan is made.
Uses of the loan
- Paid sick, medical or family leave
- Employee salaries
- Costs relating to the continuation of group healthcare benefits during periods when the worker was not working or on leave due to COVIC-19
- Mortgage payments
- Other debt obligations
Loans would be FORGIVEN if employers maintain their payroll during the covered period of March 1 – June 30, 2020.
SBA application fees waived.
Thanks to the National Law Review.
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