Last month, the U.S. Small Business Administration (SBA) reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal to all eligible applicants experiencing economic impacts due to COVID-19. The loan offers economic relief to businesses that qualify, and may be utilized along with the Paycheck Protection Program (PPP), although funds from both loan programs cannot be used for the same purpose.
SBA’s EIDL program offers long-term, low interest assistance for a small business or non-profit. These loans can provide vital economic support to help alleviate temporary loss of revenue. EIDL assistance can be used to cover payroll and inventory, pay debt, or fund other expenses. The EIDL Advance will provide up to $10,000 ($1,000 per employee) of emergency economic relief to businesses that are currently experiencing temporary difficulties, and these emergency grants do not have to be repaid.
SBA’s COVID-19 Economic Injury Disaster Loan (EIDL) and EIDL Advance
- The EIDL Advance will provide up to $10,000 ($1,000 per employee) of emergency economic relief to businesses that are currently experiencing temporary difficulties, and these emergency grants do not have to be repaid.
- The SBA is offering low interest federal disaster loans for working capital to small businesses and non-profit organizations that are suffering substantial economic injury as a result of COVID-19 in all U.S. states, including Michigan.
- These loans may be used to pay debt, payroll, accounts payable, and other bills that can’t be paid because of the disaster’s impact, and that are not already covered by a Paycheck Protection Program loan. The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%.
- To keep payments affordable for small businesses, SBA offers loans with long repayment terms, up to a maximum of 30 years. Plus, the first payment is deferred for one year.
- In addition, small businesses and non-profits may request, as part of their loan application, an EIDL Advance of up to $10,000. The EIDL Advance is designed to provide emergency economic relief to businesses that are currently experiencing a temporary loss of revenue. This advance will not have to be repaid, and small businesses may receive an advance even if they are not approved for a loan.
- The SBA is also assisting small businesses and nonprofits with access to the PPP, which is currently accepting applications until Aug. 8.
O’Reilly Rancilio attorneys are available to assist business owners with legal questions as a result of the COVID-19 crisis. Call 586-726-1000 or visit our website.