Six months of working capital – up to $2 million dollars − is available to help your practice recover from COVID-19 and other disaster-related economic losses; it’s just waiting for you to claim it.
Whether your practice is suffering due to COVID-19, civil unrest, or natural disasters, an Economic Injury Disaster Loan (EIDL) will speed your recovery.
What Is the EIDL?
The EIDL is a low-interest disaster assistance loan issued by the Small Business Administration (SBA). EIDL is designed to help you as a small business overcome a revenue loss. You can apply for a COVID-19 EIDL or a general disaster EIDL; EIDL Advance funds are no longer available.
How Much Can You Receive with an EIDL?
You can receive 6 months of working capital, up to $2 million with an EIDL. The amount you actually qualify for is based on your practice’s financial needs and your economic loss. The interest rate is less than 4% with a maximum term of 30 years.
Who Qualifies for the EIDL?
There are currently two types of EIDLs – each with disaster-specific qualifications.
To be eligible for the COVID-19 EIDL, you must have suffered substantial economic injury as a result of the pandemic and be:
- Based in any US state, territory, or the District of Columbia
- A small business of any size
The general disaster EIDL requires you to be experiencing financial hardship due to another disaster and be a:
- Business of any size located in the declared disaster areas
- Renters affected by declared disaster, including civil unrest and natural disasters such as hurricanes, flooding, wildfires, etc.
What Can You Use EIDL Funds for?
You can use the funds for a variety of resources depending on which loan you apply for.
If you receive a COVID-19 EIDL, you can use the funds for:
- Working capital
- Normal operating expenses (i.e. continuation of health care benefits, rent, utilities, and fixed debt payments)
You can use funds from an EIDL due to other disaster for:
- Losses not covered by insurance or funding from the Federal Emergency Management Agency (FEMA)
- Business operating expenses that could have been met had the disaster not occurred
How Does the COVID-19 EIDL Vary from the Paycheck Protection Program (PPP) Loan?
The COVID-19 EIDL and PPP can both provide financial relief for your practice due to COVID-19 pandemic losses, but they differ in two significant key areas:
- Eligible Expenses: You can use COVID-19 EIDL funds to cover normal operating expenses like health care, rent, utilities, and debt payments. PPP funds are primarily for payroll costs, but 25% of the loan can be used for expenses such as rent, mortgage interest and utilities, if you meet the specific stipulations
- Loan Forgiveness: Unlike the PPP money, you must pay back all of the COVID-19 EIDL funds — no exceptions. While there are stipulations and requirements, the PPP loan may be forgiven if you meet employee retention criteria, use the funds for eligible expenses, and report properly. Note: The EIDL Advance funds were forgivable, but those funds have been fully allocated and aren’t available anymore.
Proof of spending: You should retain receipts and contracts for all loan funds expenses for 3 years, per SBA recommendations.
How Can You Apply for an EIDL?
You will need to fill out an online application to request an EIDL, and be prepared to spend two hours on the application. There are different online applications for the EIDL, depending on the type of loan you require:
- COVID-19 Relief EIDL. Be sure to submit all the required information or your loan application won’t be processed.
- Disaster Assistance EIDL. After you complete the application, the SBA will send an inspector to assess your damage. If you prefer to mail in paper forms, you can download the forms here.
Related Online Training Resources
|New Sept. COVID-19 Employment Rules: Head Off Violation Penalties||Keep 100% of Your PPP Money: Forgiveness Application Strategies||Avoid Paying Back Any of Your COVID-19 Emergency Relief Money