Economic Injury Disaster Loan

The Economic Injury Disaster Loan Program (EIDL) is a scheme that can offer small businesses or private, non-profit organizations that sustain significant economic injury as a result of the declared disaster financial assistance up to $2 million (actual loan amounts are based on amount of economic injury), regardless of whether the applicant experienced physical damage.

The EIDL program offers emergency operating finance to help businesses and private, non-profit organizations meet their financial responsibilities that they would have been able to pay had the disaster not occurred.

Who Is Eligible For Economic Injury Disaster Loans?

Small enterprises or private non-profit organizations who have suffered economic harm and are situated in a county, parish, or jurisdiction that is next to one that has been declared a disaster are eligible for EIDL support.

What Are The Loan Terms For Economic Injury Disaster Loans?

The EIDL programme offers emergency operating finance to help businesses and private, non-profit organizations meet their financial responsibilities that they would have been able to pay had the disaster not occurred.It provides protection against the immediate financial harm caused by the disaster and enables you to maintain a manageable operating capital position during the affected time. EIDLs cannot make up for lost income or profits.

loan-terms-for-economic-injury-disaster-loan.png

Loan Approval Conditions

Traditional EIDL requirements have been loosened up to some extent in the following loan approval conditions:

  • Without a personal guarantee, you can borrow up to $200,000.
  • First-year tax returns are not necessary, and approval may be contingent on a person's credit rating.
  • No proof that you could not obtain credit elsewhere is necessary.
  • No collateral is required for loans under $25,000. A broad security interest in business assets may be used for loans more than $25,000. You must consent to the SBA reviewing your company's tax documents.

Key Takeaways

  • The original EIDL Advance program is no longer in effect, however EIDLs will still be usable until December 31, 2021.
  • You are not eligible to apply for the new EIDL Targeted Advance, which is only open to certain applicants in communities with low incomes.
  • The SBA will let you know if you qualify for a new EIDL Targeted Advance.
  • As of October 8, 2021, the maximum loan amount, based on the economic harm incurred, is $2 million.
  • The SBA will get in touch with borrowers for some of the loans that were approved before April 6 and are eligible for an increase.
  • The streamlined regular EIDL application process should take two hours.
  • Twitter
  • Facebook
  • LinkedIn
  • Instagram

Recommended Reading

How to Prepare for Tax Season: Bookkeeping Tips for Entrepreneurs

Tax season can be challenging for entrepreneurs, but early preparation and consistent bookkeeping make the process manageable. Organizing financial documents, using accounting software, and separating personal and business finances are essential steps. Professional bookkeeping services can save time and ensure compliance, while expense tracking and cash flow management provide financial clarity. Budgeting and quarterly tax estimates help avoid year-end surprises. Entrepreneurs should leverage deductions and credits to minimize tax liabilities. Staying updated on tax laws ensures accuracy and compliance. By adopting proactive financial habits, businesses can streamline tax season and support long-term growth.

Read more

Understanding Profit Margins: A Guide for Small Business Owners

Profit margins are essential indicators of a business’s financial health, showing the percentage of revenue turned into profit. This guide explores their significance, types (gross, operating, and net), and how to calculate them. Understanding and improving profit margins helps small business owners make informed decisions, set realistic pricing, and manage expenses effectively.

Read more

Integrated Tax Planning With Fintech Solutions: Maximizing Efficiency and Savings

Integrated Tax Planning with Fintech helps individuals and businesses optimize tax strategies, streamline processes, and reduce liabilities through advanced financial technologies. By leveraging real-time analytics, automated tools, and seamless integrations, it ensures efficiency and maximized savings, making tax management smarter and more effective.

Read more