FAQs on SBA’s Economic Injury Disaster Loans

How is the loan amount determined?

A review of the applicant’s financial performance before and after the disaster is conducted. This includes a review of gross margin, tax returns, business financial statements, and financial forecasts.

What is the difference between those who can qualify up to $500,000 and those who can qualify up to $2MM?

A small business must have the financial capacity to pay back a disaster loan. This is determined by a review of all financial statements and tax returns submitted with the application.

What is the time frame for receiving a loan decision, and, if approved, how long until the money is received?

While all applications are processed as soon as possible, a disaster loan can take up to 21 days for a decision and another 7-10 business days for disbursement.

How does a business confirm they fit the definition of a small business before applying?

The table of size standards can be found online in the small business size regulations set forth in the Electronic Code of Federal Regulations.

You can also check whether your business is small using the size standards tool.

Are personal guarantees required? For profit? Are personal assets required to be pledged?

Generally, SBA requires all the principals to provide a guarantee of the loan. Depending on the adequacy of the collateral owned by the business, guarantees can be secured or unsecured. The guarantees of the principals are not a substitute for business collateral. They are a safeguard to protect the SBA’s position.

No personal guarantees for non-profits but specific documentation will be requested from the non-profit that will include a board of directors resolution approving the act of applying for the disaster loan.

Who will facilitate applications for this program? Will banks and/or CDFI’s be used to streamline processes or help move it along?

Applications for SBA’s Economic Injury Disaster Loans are originated and serviced directly by SBA. The note is with the SBA, a federal agency.

SBA’s official resource partners will be available to provide assistance to small businesses (request help at this email: sbdc@kutztown.edu).

Are self-employed people eligible?

Generally, a self-employed person is not eligible. If that self-employed person is reporting income and managing his/her enterprise as “small business concern” with a separately registered business entity or as a Sole Prop/Single owner LLC reported on the Schedule C, they should still apply.

SBA’s website has been slow because of so many applications. How does a business follow up to make sure what they think they submitted actually went through and how can they resubmit attachments if it’s uncertain they went through?

A new loan application interface and process was launched due to overwhelming demand. Scan all supporting documents and be prepared to resubmit if a loan officer contacts the applicant for follow-up. See this site for details https://disasterloan.sba.gov/apply-for-disaster-loan/index.html

Are personal guarantees required for non-profits?

Personal guarantees are not required for non-profits.

If the SBA loan is paid off in the first 12 months before regular payments begin, is interest forgiven?

Interest is not forgiven on SBA loans. Simple interest accrues on the disbursed amount during deferment even if the loan is paid off during the deferment period. In this case, the applicant will not be allowed to reapply if it needs additional disaster funding for the same disaster.

Are Churches Eligible?

Churches are not eligible for EIDL disaster funding.

When a small business has another business entity as an owner/partial owner, what information must be submitted in addition to that already listed?

Follow the submission instructions at https://disasterloan.sba.gov/apply-for-disaster-loan/index.html. Form 413, Personal Financial Statement must be submitted for all owners that own 20% or more of the applicant.