Money. Let’s talk about money! Where is it when you need it?! No one can dispute that we’ve been hard hit both personally, financially, and professionally as a result of the COVID-19 pandemic. And you’ve probably heard a lot about the money that has been made available to businesses to help lessen the financial blow and to help keep small businesses afloat. Where is that money, you ask and how do I apply for it?
There is one loan, in particular, that is very easy to apply for at incredibly low-interest rates and incredible terms. The loan is called the COVID-19 Economic Injury Disaster Loan (EIDL) Program. This loan is offered by the Small Business Administration and is aimed at helping small businesses impacted by the pandemic.
This Federal small business loan program supports small businesses’ recovery from the COVID-19 disaster’s economic impacts by providing accessible and borrower-friendly capital.
For loans $25,000 or less: No fees if applying directly through SBA
For loans greater than $25,000: One-time $100 fee for filing a lien on borrower’s business assets plus costs to file a lien on real estate when applicable
For loans greater than $500,000 where SBA is taking real estate as collateral: One-time $100 fee for filing a lien on borrower’s business assets. Additionally, the borrower will be responsible for
If the small business is a first-time COVID EIDL applicant, complete the following steps to apply:
1. Confirm eligibility (review FAQs and below Loan Eligibility section)
3. Sign up to create portal username via SBA email invite
4. Complete portal steps and submit relevant documents
5. Respond to SBA requests for signature, confirmation, and documents
The average SBA decision timeline for $500,000 or under is several weeks.
Uses of Proceeds
Working capital to make regular payments for operating expenses, including payroll, rent/mortgage, utilities, and other ordinary business expenses, and to pay business debt incurred at any time (past present, or future)
Payments are deferred for the first 2 years (during which interest will accrue), and payments of principal and interest are made over the remaining 28 years. No penalty for prepayment.
Businesses: 3.75% fixed
Private nonprofit organizations: 2.75% fixed