EIDL Questions Answered: SBA Expert Update on the Ins and Outs of the Economic Injury Disaster Loan Program

Date: August 16, 2021

The EIDL has recently been updated to make it easier for small businesses to apply

Many small business owners have applied for and received Economic Injury Disaster Loans (EIDL), but while similar programs like the Paycheck Protection Program (PPP) are no longer open for applications, you can still apply for EIDL loans. Not only that, but in a recent NFIB webinar, an expert from the U.S. Small Business Administration (SBA) explains how the program has recently been updated to make applications faster and easier. 

To help owners understand the EIDL better, NFIB invited Veronica Pugin, a Senior Advisor to SBA’s Office of Capital Access, as a guest for our bi-weekly webinar series. Veronica has been educating small business owners nationwide on the EIDL program and SBA’s other small business programs. 

“In most small business loans [such as the PPP], the SBA plays the role of guarantor,” Pugin noted. “Small businesses get their loans through a lender, be it a bank or a financial institution. The COVID EIDL program does not work that way. Instead, the SBA is the lender, so you apply online at SBA.gov/EIDL… and once you’re approved, you have your funds dispersed to you directly from the SBA. That’s one key difference.” 

EIDL Micro-loans 

One major component of the EIDL is that there are two different kinds of loans: micro-loans worth between $1,000 and $25,000 as well as full loans worth more than $25,000, up to $500,000. “The main difference between these two is obviously the size of the loan as well as the requirements that come with them,” Pugin said. 

While micro-loans are worth less, they’re also more straightforward to receive. Applicants do not need to provide collateral or personal guarantees as they do with full loans, and you can apply for micro-loans through a mobile app (not so with full loans.) 

In most other senses the loans are the same. The interest rate is 3.75% (or 2.75% for non-profits), the repayment period is 30 years, the deferment period is up to 24 months, and the money can be used to pay for both normal operating expenses (such as payroll, rent, etc.) and for working capital. While the EIDL is not forgivable like the PPP, the long repayment period means that the monthly payments are modest. 

Determining the size of your EIDL loan 

Determining the size of one’s EIDL loan is simple: take your annual revenue, subtract the cost of goods sold from that same year, then multiply the remaining figure by two. That number is the largest EIDL you’re eligible for. 

“For example,” said Pugin, “let’s say your 2019 annual revenue was $200,000, and your 2019 costs of goods sold was $100,000. 200,000 minus 100,000 is 100,000, times two equals 200,000. That’s how much of a loan you’re eligible to apply for.” 

EIDL Processing 

While the EIDL was previously plagued with slowdowns and backlogs, Pugin says that this is no longer a concern. 

“There was over 600,000 loan-increase backlogs, but as of [August 10th] that has been cleared up. There are still new applications we’re still processing, but the backlog of those who were delayed have been cleared up. As a result, we’re ready to process new applications in a timely manner, so you can get the money your small business needs.” 

Pugin then took audience questions, followed by the NFIB experts Beth Milito and Holly Wade diving into PPP forgiveness, including the recently-launched SBA forgiveness portal. 


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