What You Need to Know About SBA’s Disaster Loan (EIDL)


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Revised 3/31/2020

The U.S. Small Business Administration is offering low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVsID-19). Through this process, SBA is offering an emergency cash advance of up to $10,000 ($1,000 for each employee, $10,000 max) that you do not need to pay back. 

Who can apply?
In order to be eligible, you must be a small business (in most industries, 500 employees or less).

  • Maine small businesses directly affected by the disaster – common eligible businesses including: retailers, restaurants, tourism-based businesses, manufacturers, owners of rental property, hotels, wholesalers, and many more.
  • Private nonprofits
  • Small agriculture cooperatives are eligible, but agricultural enterprises are not
  • Small aquaculture businesses

How to Apply?
As of 3/31/2020, SBA has created a streamlined application process. You must complete the application in one sitting. The last step of the application process contains a checkbox to be considered for the $10,000 advance. You’ll also need your banking information. More info or to apply, click here.

How do I access the $10,000 emergency cash advance?
The SBA is providing UP TO $10,000 ($1,000 for each employee, $10,000 max) to applicants that does not need to be repaid. To be considered for this advance, you must submit an application. The funds can be used for employee leave, maintaining payroll, increased costs due to supply chain disruption, mortgage or lease payments or repaying obligations that cannot be met due to revenue loss. On the application, check the box on the third screen (“additional information”) to be considered for this advance. 

How can the loan be used? 
The loans are for working capital which includes fixed debts, payroll, accounts payable, and other bills that can’t be paid due to the disaster’s impact. It does not cover lost sales.

How much can I apply for?
You will not be asked how much you would like to borrow or how much you need as a cash advance. The SBA uses the information you provide to determine the loan and advance amounts. Small businesses can receive a secured loan up to $2 million, and an unsecured loan up to $25,000.

What is the lending criteria?

  • Credit History – Applicants must have a credit history acceptable to SBA. The SBA will look at extenuating circumstances and consider the impact of the pandemic on the business.
  • Repayment – As with all loans, you will need to prove you have the ability to repay. Repayment term can be as long as 30 years.
  • Collateral – To get loans greater than $25,000, you must provide collateral. Loans under $25,000 can be unsecured.

Gather Your Materials

  • Business information
    • Contact information and social security numbers for all applicants
    • Employer Identification Number (EIN) for business applicants
  • Financial information – Know your gross revenues, cost of goods, and have a good handle on your operating expenses for the last 12 months. Consider the total amounts and payments due for debts that will be paid over the next 12 months or longer (i.e. mortgages, student loans, credit cards, etc.)
  • Your banking information if you are applying for the emergency cash advance.

Other helpful info:

  • If you previously filled out an application and are interested in the emergency cash advance, you will need to complete a new application.
  • If you need to check the status of your application, email disastercustomerservice@sba.gov or call (800) 659-2955. SBA has brought in outside resource for the online application & call center support to shorten wait times.
  • You can get an SBA Disaster Loan and a Paycheck Protection Program loan (PPP), but the $10,000 grant/advance from EIDL gets deducted from the forgivable payroll.  Also, the funds received from the loans cannot be used for the same purpose.

What’s next? What should you expect?

  • You will receive email confirmation that your application has been submitted
  • You will receive an email letting you know that your application is under review.
  • BE PREPARED: You will be contacted by someone from the SBA 
    • Have your monthly expenses and financial projections ready (the SBDC can help with this!)

Need help? Contact your SBDC advisor. Request advising here.