May 17, 2021 By SmartBiz Team

If you have experienced substantial economic injury and are a businesses located in a declared disaster area, you may be eligible for an SBA Economic Injury Disaster Loan (EIDL). The program was temporarily put on hold this year. However, on June 15, 2020, the SBA announced that it was again opening the program. This means that business owners, independent contractors, freelancers, and gig workers are eligible to receive a $1,000 grant that does not have to be repaid.

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SBA Administrator Jovita Carranza says:

With the reopening of the EIDL assistance and EIDL Advance application portal to all new applicants, additional small businesses and non-profits will be able to receive these long-term, low interest loans and emergency grants – reducing the economic impacts for their businesses, employees and communities they support.”

What is an EIDL?

Small businesses, small agricultural cooperatives and most private nonprofit organizations located in a declared disaster area and which have suffered substantial economic injury may be eligible for an SBA Economic Injury Disaster Loan (EIDL). These loans were designed to help small business owners meet financial obligations and operating expenses that could have been met had the disaster not occurred.

EIDL deadlines

The Economic Injury Disaster Loan (EIDL) program for the COVID-19 Pandemic disaster declaration is extended to December 31, 2021. The deadline extension comes as a result of the recent bipartisan COVID-19 relief bill passed by Congress and enacted by the President Dec. 27, 2020.
To date, the SBA has approved $197 billion in low-interest loans which provides working capital funds to small businesses, non-profits and agricultural businesses make it through this challenging time.

Who is eligible for the EIDL grant program?

Those eligible for SBA disaster loans and grants include:

  • Small businesses
  • Independent contractors
  • Freelancers
  • Sole proprietorships, with or without employees
  • Gig workers
  • Small businesses with less than 500 employees
  • Agricultural businesses

How much can I get from EIDL?

EIDL loans go up to $2 million. Small businesses are subject to a 3.75% interest rate, while nonprofits have a 2.75% interest rate. Terms go up to 30 years.

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How can the funds be used?

Unlike the PPP loan, which can only be used for payroll, business mortgage interest, business rent or lease payments and business utility payments, EIDL loan funds can be used for a wider-range of business working capital like paid sick leave, payroll, buying materials, rent, and repaying obligations.

The funds are not supposed to be used for physical repairs, expansions, bonuses, or refinancing long-term debt.

Can I get both EIDL and PPP?

Yes, but you can’t use the funds for the same purpose. You may also be able to roll an EIDL loan into a PPP loan, potentially qualifying for forgiveness and decreasing the interest rate to 1 percent.

How long will it take to get an EIDL?

The SBA initially reported that EIDL advances would go out within three days of a successful application being submitted. That doesn’t seem to be happening. It’s difficult to estimate when you’ll receive the advance. Patience is a virtue here.

Where can I apply?

Here’s a link to the official SBA application.


The estimated time to complete the entire application is two hours and ten minutes, although you may not need to complete all parts. You are not required to respond to this collection of information unless it displays a currently valid OMB approval number. (Office of Management and Budget (OMB) Control Numbers - Assigned Under the Paperwork Reduction Act of 1995.

Additional resources for affected small businesses

SmartBiz is dedicated to providing business owners with the information and support they need to weather the economic crisis. The SmartBiz Small Business Blog has the following resources and more to help you get back up and running.

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