The COVID-19 pandemic has taught everyone that any natural calamity or disaster can have a significant toll on your finances. Considering the diminishing condition of small business owners in the already shut market during the pandemic, many governments passed relief funds. These funds were primarily released to help individuals and small businesses who have been suffering financially due to the COVID-19 pandemic. A significant part of the financial aid acts is the Economic Injury Disaster Loan (EIDL).
While SBA business loanswere also flexible options for small business funding, small business administration(SBA) extended the affordability to businesses slammed by the COVID-19 pandemic.
What are the Types of SBA Disaster Loans?
1. Home Disaster Loans
Home disaster loans are usually availed by renters or homeowners in order to carry out repair and maintenance of disaster-damaged real estate or self-owned property. In addition, these loans can also be used to pay an insurance deductible if required.
2. Business Physical Disaster Loans
Business physical disaster loans are taken mainly by businesses for repairing or replacing disaster-damaged business properties. These properties may include real estate, inventories, supplies, machinery, equipment, and much more. Small or large-scale business owners who are wondering whether they are eligible for business physical disaster loans must be assured that no matter the size of their business, they can readily apply for it. Even non-profit organizations like charities, churches, etc., can also avail the loan amount.
3. Economic Injury disaster Loans
Economic injury disaster loans are working capital loans that aid small businesses, small agricultural cooperatives, non-profit private organizations with funds, the organization can readily apply for the loan and address their urgent financial needs that cannot otherwise be met as a direct result of the disaster. These loans are primarily launched to aid and assist through the recovery period of the disaster.
What is the Eligibility of Economic Injury Disaster Loans?
If you are a small or enterprise-level business owner wondering about the eligibility for small business loans, keep reading through to learn more.
1. You are a cooperative, business, or employee stock ownership plan having 500 or fewer employees.
2. You are a sole proprietor, independent contractor, and private non-profits agency.
3. Your business has sustained an economic injury.
4. Your business is operational in a disaster-declared area.
What are the Uses of Economic Injury Disaster Loans?
The business owners use the economic injury disaster loan for a variety of purposes, including:
- Maintaining the payroll
- Balancing the skyrocketing costs of materials and equipment due to supply chain limitations
- Paid sick leaves for employees
- Mortgage or rent payments
- Repay unmet obligations due to revenue loss
What are the Benefits of Economic Injury Disaster Loans?
Small business owners highly appreciate and get a great benefit from getting the economic injury disaster loans assistance. Here are some prominent features of economic injury disaster loans that make them unique and a go-to option for small business owners:
- The small business owners or say borrowers do not have to offer a personal guarantee for loan amounts less than or equal to $200,000.
- If needed, the borrower can also request for an advance to meet their urgent financial needs in a time of crisis. The advance loan amount can range up to $10,000, which will be transferred to their account within 3 business days.
- The business can apply for the utmost $2 million.
- The borrowers do not have to pay the upfront cost like loan fees or payment penalties for the advance.
Has your business faced a financial crisis, and you are planning to apply for an economic injury disaster loan? If yes, use the SBA disaster loan calculator to calculate the EMIs and apply for the loan amount accordingly.