** UPDATE ** The SBA has suspended applications until further funding becomes available. We are monitoring this — stay tuned.
I’m sure you’ve heard of it. But what’s the deal and why does it feel so confusing?
Well, information is truly changing from moment to moment. The Small Business Administration was releasing guidelines TO their guidelines as late as April 6th, 2020… which was 4 days ago.
The Emergency Injury Disaster Loan, or the EIDL, is available to any business with under 500 employees, and right now? I’m a little more into the EIDL than the PPP (but more on that later).
Here are the basics:
- The loan can be approved based solely on credit score.
- You do not need to submit tax returns or make a personal guarantee.
- It’s a low-interest loan or loans provided by the SBA, the Small Business Administration.
- It’s super easy to apply through their website
- The approval “may” be based on credit and payment worthiness…this is a lil cagey and unclear. We don’t really know who will get approved. My advice? Be nice to whomever you talk to, it could make all the difference.
- The EIDL can be used for paid sick leave, payroll, rent, or mortgage payment, or repaying obligations that cannot be met due to revenue loss.
- Yes, there is a $10,000 “forgivable” advance available to your loan when you apply (NOTE: The small business community keeps calling this advance “free money,”… let’s just note, no money is ever free. If you also apply for the PPP, your advance for your EIDL is then not forgiven; it’s applied to the forgiven portion of your PPP. I’m watching this one.)
My team and I have been on the phone with the SBA many times this week. As far as we know, as of April 7th, no one, no applicant, has completed the full program or been funded yet. Applications will take 3 to 4 weeks to process. Based on the sheer number of applications we are seeing amongst our own clients… we think this could take longer.
Download our FREE Guide to the EIDL.
Stay on the lookout for more updates, and join our Small Business Financial Dispatch Facebook Group created to help you navigate these confusing loan options and more.