Disaster loans from the SBA (Small Business Administration) offer Federal assistance to rebuild or repair the private sector, non-farm disaster-related losses. This program is the only type of SBA assistance that is not limited to just small businesses. Learning more about this program is essential to determine if you would benefit from it.
Understanding Economic Injury Disaster Loans (EDIL) from the SBA
EIDL provides up to $2 million in financial assistance to non-profit and private organizations and small businesses experiencing a significant economic injury because of a declared disaster. The actual amount of the loan is based on the total amount of the economic impact. This is provided regardless of if you sustained any type of physical damage.
With the EIDL, you can meet your financial obligations that would have been possible if the disaster had never occurred. The relief loan allows you to maintain working capital during the time period when the disaster impacts you. EIDLs are not designed to replace lost revenue or sales.
Eligibility for EIDLs
To be considered eligible for assistance from an EIDL, a private non-profit organization or small business must have sustained some type of economic injury. This loss had to occur in a disaster-declared area, as well.
EIDL Terms
Currently, the SBA offers up to $2 million in disaster relief and assistance to businesses. This $2 million cap for the loan covers both EIDLs and physical disaster loans. Receiving this loan does not require you to pay an upfront fee. Also, no early payment penalties will be charged by the SBA. When it is time to repay the loan, the terms are determined by your ability to begin making payments and the long-term effects of the disaster you were affected by.
This loan’s maximum length is 30 years, and the interest rate will never exceed four percent. The payment frequency will vary based on your situation and needs.
Benefiting from an EIDL
If a disaster has impacted your area and the area has been declared a disaster area, then you may qualify for funding from an EIDL. If you are unsure if you qualify, you can contact the SBA for more information. When applying for this loan, be sure to have all related and pertinent information, which will help ensure the funding needed is received. Knowing what options you have to recover from a disaster situation will help you avoid the long-term consequences of these situations.
