Frequently Asked Questions: COVID-19 Economic Injury Disaster Loan (EIDL)

Summary

A Small Business Administration Frequently Asked Questions document on the COVID-19 Economic Injury Disaster Loan (EIDL), footed 9/8/2020. It compares EIDL with the Paycheck Protection Program, listing EIDL terms of 3.75% APR for businesses and 2.75% APR for non-profits over 30 years, an amount of six months of working capital, collateral required over $25,000, a personal guarantee only over $200,000, no forgiveness and a first payment deferred 1 year, against PPP loans of up to $10 million at 1% that are no longer available. Other answers cover eligibility for businesses with 500 or fewer employees, the application and loan quote process, the 81% ownership requirement, decline reasons and reconsideration within 6 months, and new disaster loans for civil unrest or other declared disasters.

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Frequently Asked Questions
COVID-19 Economic Injury Disaster Loan (EIDL)
1. What is the difference between Economic Injury Disaster Loan (EIDL) and the Paycheck
Protection Program (PPP)?

Economic Injury Disaster Loan (EIDL) Paycheck Protection Program
NO LONGER AVAILABLE
DESCRIPTION Long-term direct loan program from the Loans made through nearly 5,500
SBA lenders across the country
PURPOSE To meet financial obligations and Designed to provide an incentive for
operating expenses that could have small businesses to keep workers on the
been met had the disaster not payroll.
occurred.
AMOUNT Six months of working capital. Up to $10 million
AVAILABLE
TERMS 3.75% APR (fixed): businesses 1%

2.75% APR (fixed); non-profits 2 years or 5 years, depending on when
loan was approved
30 years
COLLATERAL Required for loans over $25,000 No collateral required
PERSONAL Requires a personal guarantee only Not required
GUARANTEE? for loans exceeding $200,000
FORGIVABLE? NO. Loan may be repaid at any time with FORGIVEN if all employee retention
no pre-payment penalties. criteria are met and funds used for
eligible expenses.
If borrower received EIDL Advance,
SBA is required to reduce the borrower’s
loan forgiveness amount by the amount
of the EIDL Advance.
Details available online at
SBA.gov/PaycheckProtection.
1st PAYMENT 1st payment deferred 1 year; you can Payments will be deferred for a period of
make payments if you like. time depending on when borrower
submits a request for loan forgiveness.
Complete and submit SBA Form 1201
Borrower Payments on Pay.gov.
APPLY Apply online No longer available. Check
SBA.gov/PaycheckProtection for latest
information.

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Frequently Asked Questions
COVID-19 Economic Injury Disaster Loan (EIDL)

2. Can I apply for both COVID-19 EIDL and PPP?
Yes. Borrowers can apply for both the PPP and EIDL, although funds from both cannot be
used for the same purpose.
• The Paycheck Protection Program loan proceeds must be used for eligible
purposes according to guidance and some or all of the loan may be forgiven if
used properly. The authority to make PPP loans has expired and new PPP
loans are no longer available. Check online for latest information.
• EIDL funds can be used for working capital and normal operating expenses, such
as continuation of health care benefits, rent, utilities, fixed debt payments.
• Note that businesses that received an EIDL Advance in addition to the PPP loan
will have the amount of the EIDL Advance subtracted from the forgiveness amount
of their PPP loan.
3. What can I use COVID-19 EIDL funds for? And how is that different from PPP funds?
EIDL proceeds can be used to cover a wide array of working capital and normal operating
expenses, such as continuation of health care benefits, rent, utilities, and fixed debt payments.
The Paycheck Protection Program loan proceeds must be used only for eligible payroll costs
and certain eligible nonpayroll costs as set forth in program guidance. The loan may be
forgiven if all employee retention criteria are met and funds were used for eligible expenses.
Retain receipts and contracts for all loan funds spent for 3 years.
4. Who is eligible for COVID-19 EIDL?
Applicant must be physically located in the United States or designated territory and
suffered working capital losses due to the coronavirus pandemic, not due to a downturn
in the economy or other reasons. Eligible applicants include:
• Businesses with 500 or fewer employees or defined as small per SBA.gov/SizeStandards
• Cooperatives with 500 or fewer employees
• Agricultural enterprises with 500 or fewer employees
• Most private nonprofits
• Faith-based organizations
• Sole proprietorships and independent contractors
Ineligible businesses include those engaged in illegal activities, loan packaging, speculation,
multi-sales distribution, gambling, investment or lending.

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Frequently Asked Questions
COVID-19 Economic Injury Disaster Loan (EIDL)

5. What if I am not a U.S. Citizen but my business meets all the other criteria for a COVID-19 EIDL?
A non-US citizen who owns 20% or more of the business is eligible if they are classified as a “non-
citizen national” or “qualified alien.” Qualified aliens include permanent residents with a current
green card. Refer to SOP 50 30 9, Appendix 7.
6. What is the process to receive an Economic Injury Disaster Loan (EIDL) for COVID-19?

Apply •www.sba.gov/disaster

• This is an estimate of qualified loan
amount; does not mean loan is
Loan Quote approved. Applicant needs to choose
loan amount up to this maximum.

• Loan Officer reviews
Application for completeness
Reviewed • May contact applicant
for more information

Loan • Approved or
Decision Declined

IF APPROVED IF DECLINED
Email sent to applicant(s) to sign loan Decline letter sent via email.
documents.
Be sure to download a copy for your records.
Loan proceeds transferred to bank account Applicant can request reconsideration in writing
within 5-10 business days. within 6 months of the date of decline letter.
Retain receipts and contracts for all loan funds Send to:
spent for 3 years. E-mail: pdcrecons@sba.gov
Make payments through Pay.gov OR mail Mail: U.S. Small Business Administration
payments to: Disaster Assistance Processing &
U.S. Small Business Administration Disbursement Center
721 19th Street 14925 Kingsport Road
Denver, CO 80202 Fort Worth, Texas 76155
On mailed payment, include: Include your application number and any
• Business Name information required to overcome the reason for
• Borrower’s Name decline.
• Tax ID/EIN or SSN The process will vary depending on reason
• Application Number for decline.

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Frequently Asked Questions
COVID-19 Economic Injury Disaster Loan (EIDL)

7. How can I check the status of my application?
Applicants will receive an invite to log-in to the customer portal to review the application,
select an eligible loan amount, and submit for final review. If the loan is not approved, the
applicant will receive an email notification with a detailed reason for the loan decline,
including instructions on how to appeal the decision. Contact customer service to check
on status: 1-800-659-2955.
8. I received an initial loan quote. Does that mean I’ve been approved?
No, that is simply an estimate of the loan you may be qualified to receive. Once you receive the
initial loan quote:
1. Log into your SBA Loan Portal
2. Choose how much you want your loan amount to be, up to the maximum quoted
3. Be sure to click the submit button
Once that is completed, your application will be advanced to the final review stage. You may be
contacted by a Loan Officer to submit additional information. Please respond promptly so your
application can be processed.
9. I received the loan; how do I make payments?
Set up online payments by completing SBA Form 1201 Borrower Payments on Pay.gov.
If you prefer to mail payments, send them to:
U.S. Small Business Administration
721 19th Street
Denver, CO 80202
On mailed payments, be sure to include:
• Business Name
• Borrower’s Name
• Tax ID/EIN or SSN
• Application or Loan Number
10. I have a business partner, but he/she does not want to be included on the COVID-19 EIDL
application. Can I still apply?
All 20% or more owners are required to be included on the application and at least 81%
ownership needs to be accounted for on the application in order to be considered.

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Frequently Asked Questions
COVID-19 Economic Injury Disaster Loan (EIDL)

11. What if I need more money than I’ve been approved for?
COVID-19 EIDLs can be modified by increasing the amount up to 6 months of working capital.
An increase can be requested either before or after accepting the loan. If applicant is in urgent
need of funds, accept the maximum loan amount offered and then request an increase by
providing additional documentation.
If you were approved for a loan and would like to request an increase to the amount, send an
email that states your need for an increase to the loan amount to pdcrecons@sba.gov with the
word “INCREASE” in the subject line. Include any additional information that may assist us in
considering an increase for your application. For example:
1. Your most recent Federal tax return for your business along with a signed IRS Form 4506-T
2. For updated financials (Gross Revenue, Cost of Goods Sold, cost of operation, or other
sources of compensation), submit Form 3502.
12. What if I don’t need as much money as I’ve been approved for?
Have you received the 1. Log into your SBA Loan Portal
initial loan quote? 2. Choose how much you want your loan amount to be, up to
the maximum quoted
3. Be sure to click the submit button
Already received Make check payable to SBA and send with note that indicates
funds via Direct whether the funds should be applied to the EIDL, Advance or
Deposit? both, and include:
• Business Name
• Borrower’s Name(s)
• Tax ID or SSN
• Loan Number

Already received If the check has not been deposited, write VOID across the
funds via check? front and return check to the address below. Include:
• Business Name
• Borrower’s Name(s)
• Tax ID or SSN
• Application Number

Send to: U.S. Small Business Administration
721 19th Street
Denver, CO 80202

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Frequently Asked Questions
COVID-19 Economic Injury Disaster Loan (EIDL)

13. I have multiple businesses. Can I submit multiple COVID-19 EIDL applications?
Yes, you can submit one application per eligible business. However, at least 81% ownership needs
to be accounted for on the application.

14. I’ve been declined for COVID-19 EIDL. What could be the reasons for that decline?

Decline reasons are unique to the applicant. The most common reasons for a decline are:
• Unsatisfactory credit history. Because EIDL is a government loan, federal regulations
require applicants to meet minimum credit standards to qualify.
• Unverifiable information. If an applicant does not respond within 7 days to requests for
additional information from loan officers, their application may be declined. Request a
reconsideration to reactivate your application.
• Ineligible non-US citizen status. Applicants must be US citizens, non-citizen nationals, or
qualified aliens. Refer to SOP 50 30 9, Appendix 7 for further information.
• Business activity not eligible.
• Economic injury not substantiated. There are two possible reasons for this decline: 1) The
economic injury is less than the amount received for the EIDL Advance; or 2) The
information submitted does not indicate an economic injury.
• Character reasons. Applicants may be declined if they have been convicted of a felony in
the past five years; or ever been engaged in the production or distribution of any product or
service that has been determined to be obscene by a court of competent jurisdiction; those
who are currently suspended or debarred from contracting with the federal government or
receiving federal grants or loans; and/or those who are presently subject to an indictment,
criminal information, arraignment, or other means by which formal criminal charges are
brought in any jurisdiction.
• Failure to respond. If applicants do not respond to emails asking for additional
information or to sign loan closing documents, the application will typically expire after 60
days.
15. Can I request a reconsideration if my COVID-19 EIDL application is declined?
Applicant has up to 6 months to request reconsideration. Send reconsideration requests to:
E-mail pdcrecons@sba.gov
Mail U.S. Small Business Administration
Disaster Assistance Processing and Disbursement Center
14925 Kingsport Road
Fort Worth, Texas 76155

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Frequently Asked Questions
COVID-19 Economic Injury Disaster Loan (EIDL)

Include any additional information that may assist us in your request. If the decline letter
requested specific information or documentation for reconsideration, you must include those
items.
Be sure to include:
• Business Name
• Borrower’s Name
• Tax ID/EIN or SSN
• Application/Loan Number
The process will vary depending on reason for decline.
16. If I’ve already received a COVID-19 EIDL and I’ve been affected by civil unrest, can I ask for more
funds?
If you are in an area that has a Disaster Declaration, which includes civil unrest and
disasters such as flooding, storm damage, wildfires or earthquakes, you may be eligible
for additional SBA Disaster Loans to cover damage to your home, personal possessions
and/or business.

Check disasterloan.sba.gov to see if there is a disaster declaration for your area.

SBA’s COVID-19 relief programs, such as the PPP and EIDL, are for economic impacts
resulting from the coronavirus pandemic, and not for physical or economic disaster losses
caused by civil unrest or other disasters.

17. I already have a PPP and COVID-19 EIDL and my business has not recovered yet from the
impacts of the COVID shutdowns; would I qualify for another loan?
If your business received a PPP loan or EIDL assistance because of COVID-19, and even you have
another SBA Disaster Loan from a previous disaster, you may still qualify for a new SBA disaster
loan for losses resulting from a declared disaster in your community.
18. If I get another Disaster Loan due to civil unrest or a natural disaster, can I consolidate the new
loan with my COVID-19 EIDL? Or can I use it to pay off the COVID-19 EIDL?
No. Each SBA Disaster Loan is a separate loan; they cannot be consolidated or used to pay off
earlier loans.
If you qualify for another SBA disaster loan due to a different declared disaster in your area, the
new loan must be used for the purposes listed in your loan closing documents, which may

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Frequently Asked Questions
COVID-19 Economic Injury Disaster Loan (EIDL)

include working capital or physical damage repairs. It cannot be used to refinance or payoff
existing SBA disaster loans from previous disaster events, including COVID-19.
Retain receipts and contracts for all loan funds spent for 3 years so you’ll be able to document
use of funds for each loan.
19. Given that my business has not yet recovered from COVID shutdowns, how will I handle
repayment?
Payments for COVID-19 loans are deferred automatically for 1 year. Disaster loans that are
already in repayment status for disasters that occurred before COVID-19 are deferred through
December 2020. New disaster loans for civil unrest and other disasters are also automatically
deferred for 1 year.
If you qualify for a new disaster loan, you can request that SBA extend the deferment of your
other loan payments to help with the financial hardship.
20. How is the process for applying for a civil unrest or other disaster loan different from the COVID-
EIDL process?
If your only experience with SBA Disaster Loans has been with the EIDL program for COVID-19,
you’ll find the process different for declared disasters such as civil unrest or other disasters.
o There are two assistance programs:
Physical damage loans that cover repairs and replacement of physical
assets damaged in a declared disaster that are not covered by
insurance.
Economic injury loans to cover small business operating expenses
after a declared disaster.
o The application process is different:
Apply at disasterloan.sba.gov
Eligibility and loan requirements are different than the COVID-19 program,
including collateral and insurance requirements. If secured, these loans may
require a lien on your property and evidence of flood, hazard and/or
windstorm insurance. Visit SBA.gov/Disaster for more information.

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Frequently Asked Questions
COVID-19 Economic Injury Disaster Loan (EIDL)

Disaster Assistance at a Glance
Types of Assistance Borrowers Purpose Max. Amount
Business Loans Businesses and private Repair or replace real $2 million
nonprofits estate, inventory,
equipment, etc.
Economic Injury Loan Small businesses, Working capital 6 months of working
(COVID-EIDL) agricultural concerns, (operating expenses for capital (operating
private nonprofits and agricultural concerns and expenses for agricultural
religious institutions nonprofits) concerns and nonprofits)

Economic Injury Loans Small businesses and Working capital $2 million
(All other disasters) private nonprofits

Home Loans—repair Homeowners Repair or replace $200,000
primary residence;
damage not covered by
insurance
Home Loans—personal Homeowners and Repair or replace $40,000
property renters personal property not
covered by insurance
Mitigation Businesses, private Mitigate / prevent future Increase of up to 20% of
nonprofits, and loss of the same type verified physical
homeowners damage. Homeowners
limited to $200,000.

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Our copy: COVID-19_EIDL_FAQs.pdf
Original: www.sba.gov