By Michelle Loredo
The U.S. Small Business Administration (SBA) recently announced that they are now accepting new applications for the SBA Economic Injury Disaster Loan. This new cycle of applications will be open from Monday, June 15 to Tuesday, June 30. The application is online and it can found on the SBA Disaster Loan website.
Here are the top five things you need to know about the loan in order to successfully navigate the process.
Who Qualifies for the Loan?
Small business owners and non-profits, a private business under the 501(c)3 tax code, qualify for the EIDL Loan. Agricultural businesses are also able to apply. To qualify as an agriculture business, you must be part of the food production section 18(b) as defined by the Small Business Act (5 U.S.C. 647(b)).
What are the Interest Rates?
The interest rates differ depending on what kind of business you run. If you’re a small business, the loan interest rate is 3.75 percent. If you’re a non-profit, the interest rate is 2.75 percent. When you first receive the loan, your first payment will be 12 months from that date you received the promissory note. The loan has a long-term repayment plan meaning, that once you receive the loan, you have a 30-year time frame to pay it back.
How Much is the Loan Eligible For?
The EIDL Loan can go up to $2 million for an applicant. If you’re a small business or a non-profit organization and you have less than 500 employees, you can apply for a loan advance of up to $10,000, $1000 for each employee. If you receive an advancement, you do not have to pay it back.
What Can the SBA Claim as a Tangible and Intangible Property for the Loan?
The loan does not require prepayment fees and there’s no forgiveness option. If the loan amount is less than $25,000, you will not have to pay security collateral. If the loan is more than $25,000, the SBA will take security interest on any personal tangible and intangible property. This includes but, not limited to: Business Equipment Business Documents Business Deposit Accounts
Who Can I Contact if I have any Questions?
If you have any questions or concerns over the loan process, you can contact the SBA Disaster Customer Service line via phone at (800) 659-2955 or email them at firstname.lastname@example.org. If you’re deaf or hard of hearing, you can contact the SBA via phone at (800) 877-8339.
The UH Texas Gulf Coast SBDC Network has resources that can help you through this process, offering both daily live webinars at 11 a.m. CST with Q&A sessions and pre-recorded webinars that work with your schedule. The daily live webinars are aimed to give updates on COVID-19 disaster loans and other resources. This includes the Economic Injury Disaster Loan, Paycheck Protection Plan and the CARES ACT 2020.