Lender Alert: Economic Injury Disaster Loans
Summary
Lender alert from the Office of Inspector General of the U.S. Small Business Administration, dated July 14, 2020, on COVID-19 Economic Injury Disaster Loans under the CARES Act. It describes the loans as covering fixed debts, payroll, accounts payable and other eligible bills, at interest rates between 2.75 percent and 3.75 percent and terms of up to 30 years. The alert notes that SBA stopped offering advances of up to $10,000 on July 11, 2020, and that the current maximum loan is $150,000 per entity or $2 million for all affiliated businesses, with disbursements made through the U.S. Department of the Treasury's automated clearing house system. It then tells lenders what to do if funds must be returned to SBA.
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Office of Inspector General
U.S. Small Business Administration
July 14, 2020
Lender Alert: Economic Injury Disaster Loans
The Small Business Administration’s (SBA’s) Economic Injury Disaster Loan program is part of the
nation’s response to the Coronavirus 2019 (COVID-19) pandemic under the Coronavirus Aid, Relief,
and Economic Security Act (CARES Act). These economic injury loans are intended to help eligible
small businesses with expenses such as
• fixed debts,
• payroll,
• accounts payable and
• other eligible bills.
Interest rates vary between 2.75 percent and 3.75 percent. Terms are based on the borrower’s ability to
repay but may be up to a maximum of 30 years. Eligibility determination is the same as for SBA’s
Payroll Protection Program loans.
Note: Beginning July 11, 2020, SBA no longer offers advances on Economic Injury Disaster
Loans. Until July 10, 2020, eligible small business owners in all U.S. states, Washington, D.C., and
territories were able to request an advance of up to $10,000.
The current maximum loan amount is $150,000 per entity or a maximum amount of $2 million for all
affiliated businesses. Loan disbursements and advances are made through the U.S. Department of the
Treasury’s automated clearing house system as deposits from SBA.
What to Do if You Must Return Funds to SBA
Lenders who have questions about eligibility or need to return money should contact SBA at
eidl.ach.inquiries@sba.gov.
What to Do if You Suspect Fraud
Warning signs of fraud include:
• Using stolen identities to qualify for funds
• Applications from ineligible persons (nonbusiness entities, suspended or debarred individuals,
etc.)
• Fake businesses established specifically to apply for SBA assistance
• Borrowers working with third parties to obtain Economic Injury Disaster Loan funds in exchange
for keeping a percentage of the funds
• Borrowers using economic injury loan money to start businesses
409 3rd Street SW., Washington, DC 20416 • phone: 202-205-6586 • fax: 202-205-7382
• Misuse of loan funds
• Reporting inflated business and financial information, etc.
• Borrowers declining loans after advance funds have been deposited
Lenders who suspect attempted fraud should contact the National Center for Disaster Fraud Hotline at
1-866-720-5721 or fill out the Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-
disaster-complaint-form.
Lenders may also report fraud, waste, abuse, or mismanagement of federal funds involving SBA
programs, operations, or personnel to the SBA OIG Hotline at (800) 767-0385. You can also submit a
complaint form at https://www.sba.gov/about-sba/oversight-advocacy/office-inspector-general/office-
inspector-general-hotline#section-header-0
409 3rd Street SW., Washington, DC 20416 • phone: 202-205-6586 • fax: 202-205-7382
File and source
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- 2020-07_SBA-OIG-Lender-Fraud-Alert-EIDL.pdf
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- SHA-256
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- Original
- www.sba.gov