- March 10, 2021
- Posted by: admin
- Category: eidl loan, loans, sba
The Coronavirus Aid, Relief, and Economic Security (CARES) Act expands the Small Business
Administration’s long-standing Economic Injury Disaster Loan Program (EIDL). The EIDL program was created to assist businesses, renters, and homeowners located in regions affected by declared disasters.
Who is ELIGIBLE?
In general, any of the following institutions that have sustained significant economic damage as a result of a disaster if they existed on March 2, 2020 or later:
• Businesses with 300 or fewer employees
• Cooperatives, ESOPs, and tribal small businesses with fewer than 300 employees
• Sole proprietors
• Independent contractors
• Most private nonprofits organizations
Note: In most cases, SBA requires a 2019 Federal Tax Return to be filed with the IRS to verify your eligibility. Certain organizations that were not required to file a 2019 Federal Tax Return are still eligible, such as churches.
What are the LOAN PARAMETERS?
• The statutory limit of SBA loans is $2 million. SBA set a maximum loan amount of $150,000 in May 2020 due to a high number of applications, but in March 2021 announced a new $500,000 limit (effective April 6) to continue to help struggling businesses.
• Payments on Coronavirus EIDL loans are deferred for one year
• Approval can be based on a credit score and no first-year tax returns are required
• Borrowers do not have to prove they could not get credit elsewhere
• No collateral is required for loans of $25,000 or less.
• The borrowers must allow the SBA to review its tax records
NOTE: EIDLs are now capped at $500,000 effective April 6
How to Apply for a COVID-19 Economic Injury Disaster Loan (EIDL)?
Apply online at http://www.sba.gov/coronavirusrelief