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Economic Injury Disaster Loans

Looking for help keeping your practice going right now? The U.S. House Small Business Committee has summarized major provisions of the Coronavirus Aid, Relief, and Economic Security Act that may be beneficial to you.

The declaration of COVID-19 as a national emergency on March 13, 2020 allows the U.S. Small Business Administration (SBA) to make Economic Injury Disaster Loans (EIDL) available. These targeted, low-interest loans to small businesses and private non-profits will provide working capital loans of up to $2 million to help respond to the temporary loss of revenue. An additional $10 billion in emergency grants of up to $10,000 to provide immediate relief for small business operating costs and $17 billion to cover 6 months of payments for small businesses was also included in recent legislation. On April 24, another $10 billion in funding for this program was approved. On March 10, 2021 Congress passed the American Rescue Plan Act of 2021 which added an additional $15 billion for the EIDL Advance Grants Program to provide grants of up to $10,000 per business to small businesses in low-income communities that have been most affected by the pandemic. The legislation also added $1.325 billion in administrative funding to the SBA so the agency has the resources and manpower necessary to implement the programs.

Additionally, express bridge loans are available up to $25,000 to small business owners who have an existing relationship with an SBA express lender. These loans will be processed quickly and can provide immediate cash flow while waiting for an economic injury disaster loan.

How do businesses get the assistance?

Each state or territory’s governor must request the SBA to issue an Economic Injury Disaster declaration that will make the loans available to small business and private, non-profit organizations. Once the declaration is made, the SBA’s office of Disaster Assistance will work with the respective governor to submit the request for assistance and make information on the application process available to all affected communities as well as updated on the SBA web site.

Who is eligible for these loans?

A small business defined by the SBA can qualify for this assistance but it varies by industry. Size standards are mostly based on the average annual receipts or the average number of employees. You can contact the Office of Size Standards by email at or by phone at 202-205-6618.

What are the interest rates and terms for the loans?

The interest rate for the loans are:

  • 3.75% for eligible small businesses

  • 2.75% for eligible private, non-profits

The loans may be used for:

  • Fixed debts

  • Payroll (see further below regarding PPP loans)

  • Accounts payable

  • Other bills that cannot be paid because of the disaster impact

Terms for the loans will be determined on a case-by-case basis with most loans being offered with long-term repayment of up to a maximum of 30 years.

EIDL versus PPP

Applicants that received an SBA Economic Injury Disaster Loan (EIDL) from January 31, 2020 through April 3, 2020 may apply for a Paycheck Protection Program Loan subject to the following:

  • If the purpose of the EIDL loan was for a purpose other than paying payroll costs, the applicant may apply for and receive a PPP loan.

  • If the purpose of the EIDL loan was to pay payroll costs, PPP loan proceeds must be used to refinance the EIDL loan (not including the amount of any advance made under the EIDL loan, which will not be included in the PPP loan because the advance does not need to be repaid). Additionally, proceeds from any advance up to $10,000 on the EIDL loan will be deducted from the loan forgiveness amount on the PPP loan. In other words, applicants will not be able to “double dip” on forgiveness of funds from both the EIDL and PPP programs. Applicants that receive a forgivable advance under EIDL will have the forgiven amount of the advance deducted from the loan forgiveness that the Applicant receives under PPP.

Additional COVID-19 business management resources

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