Economic Injury Disaster Loan (EIDL) Program Update — New SBA Grants & Loans For Small Businesses and Independent Contractors

Calling All Small Business Owners and Independent Contractors — Don’t Miss Out!

The good news is that the SBA has reopened the Economic Injury Disaster Loan (EIDL). As of June 15, 2020, many companies that fall under the label of a small business can apply. There originally was a grant of up to $10,000 that was available. This grant is no longer available. If you were one of the many businesses that took advantage of this early on, you do not have to repay the grant money. The deadline to apply for this Economic Injury Disaster Loan (EIDL) is December 16, 2020, but the allocated funds will run out quickly, so make sure to apply soon.

Economic Injury Disaster Loan (EIDL) Requirements

Let’s look at some of the specifics of this loan, and who can qualify. Anyone that falls under the following categories is eligible:

• Independent Contractors
             
• Freelancers
             
• Gig Workers
             
• Small Businesses that have less than 500 employees
             
• Agricultural Businesses
  
  

What does this mean for you? There is more money available to help you continue to run your business the way you need during this COVID crisis.

Some things to keep in mind are what you cannot use the loans for. It is not intended to pay for expansion or purchase of property. Also, this should not be used to pay dividends or bonuses. These loans are meant for keeping your working capital going. This is the money it costs to run your business. There are other ways that the funds should not be used.

Good record keeping is paramount here. You may be asked to show how the funds were allocated. Any way you keep your records will work.

What Can You Use Economic Injury Disaster Loan (EIDL) Funds For?

Unlike other government backed capital, your Economic Injury Disaster Loan (EIDL) funds can be used for almost any of your businesses needs with very few restrictions.  The restrictions include debt incurred prior to the COVID-19 pandemic, payment of dividends to owners or repair of physical damage to property.

The most common uses for Economic Injury Disaster Loan (EIDL) funds are:

• Working capital to maintain cash flow and operations
             
• Costs to cover employee sick leave related to COVID-19

• Inventory costs

• Payment of debts incurred prior to the COVID19 pandemic

• Mortgage or Rent of commercial space

• Payroll

After You Apply

Now that you submitted your complete application, what’s next?

The loan needs to be processed. Loan applications can take a few weeks to process, so be patient. Monitor your bank account on a regular basis. If you would like to follow up on your loan application, you can contact the SBA Disaster Assistance Customer Service Center. 

Finally, if you are looking for help with disaster relief funding please reach out to SBG Funding. We can help assist you with your Economic Injury Disaster Loan (EIDL) process, from start to finish!

You may also enjoy reading:

• 3 More Ways to Best Use Relief Money for Your Small Business
• Frequently asked questions about SBA 7(a) loan