Economic Injury Disaster Loan (EIDL) FAQs

by
Funding, Lending
March 31 |

Due to the COVID-19 crisis, the US Small Business Administration (SBA) has made funding available to small businesses in the form of Economic Injury Disaster Loans. To learn more, please read these FAQs below and refer to the resources referenced throughout.

More recently, the US Congress passed the CARES Act, which authorizes up to $349 billion in forgivable loans to small businesses. To learn more about the Paycheck Protection Program, click here.

Novo will be updating this as more information is provided.

What is an Economic Injury Disaster Loan (EIDL)?

The Economic Injury Disaster Loan, or EIDL, is a low interest loan that is intended to provide up to $2 million per business for longer term relief. Unlike funds received through the Paycheck Protection Program (PPP), the EIDL is not forgivable. After you have been approved for the loan, you will be eligible for a $10,000 forgivable grant as an advance on the loan.

Where can I get an EIDL?

EIDLs are provided directly by the SBA. You can apply for an EIDL and learn more here.

When can I get an EIDL?

EIDLs are currently available in all 50 states, Washington DC, and US territories, and the SBA is accepting applications here.

Am I eligible for the EIDL as a sole proprietorship or an independent contractor?

Yes, the SBA has made the EIDL available for sole-proprietorships or independent contractors. You can apply here if this fits your situation.

How much am I eligible to receive?

The maximum receivable amount of an EIDL is $2 million. Unlike the PPP, the calculation to determine the eligibility and amount of an EIDL is not publicly available and may vary significantly depending on your business. We recommend that you read more here and consult your tax professional or lawyer for guidance on how much your business could receive.

When will my funds be made available?

The SBA has stated that the funds of the $10,000 grant will be made available within 3 days of a successful application. There has been no guidance on how long the full EIDL amount will take

What are the terms of forgiveness?

Unlike funds acquired under the PPP, an EIDL is not eligible for forgiveness. Only the $10,000 grant associated with the EIDL is forgivable.

What are the requirements for the loan?

Requirements vary by the type and size of business. Please refer to the SBA directly for their requirements for these loans, or ask your tax professional or lawyer.

What are the interactions with other SBA Loans?

You can apply for and receive funds from both an EIDL and PPP loan, but the amounts must be used to pay for separate expenses.

You can apply for an EIDL here.

Learn more about EIDLs and the SBA’s coronavirus response here.

Novo recommends that you speak with your tax professional or lawyer before making any major financial decisions. This is intended for informational purposes and is not a recommendation or endorsement of the EIDL.

 

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