Companies that are still reeling from the impact of COVID-19 have a new chance to secure a loan and maybe even grab some quick cash.
The Small Business Administration is reopening its Economic Injury Disaster Loans, or EDIL program, the agency said Monday, allowing businesses and nonprofit organizations with 500 employees or fewer to apply for low-interest assistance and an emergency advance grant of up to $10,000. The advance, based on a company’s headcount ($1,000 per employee), doesn’t have to be paid back.
The loan program predates the pandemic and is separate from the Paycheck Protection Program, which is still accepting applications until June 30. The SBA had previously halted most EIDL applications after overwhelming demand.
Here’s what to know about the loan program’s grand reopening:
- What can the loans be used for? “These loans may be used to pay debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact, and that are not already covered by a Paycheck Protection Program loan,” the SBA says.
- What’s the interest rate? 3.75% for small businesses; 2.75% for nonprofits.
- How long do I have to pay it back? The SBA says it offers loans “with long repayment terms, up to a maximum of 30 years.”
- What’s up with these emergency advances? They caused a lot of controversy the first time around, as many businesses that applied never received a response. There was also some confusion about the advance amount. It’s $1,000 per employee, up to $10,000. The good news is, you don’t have to pay it back, even if you’re denied a loan.
- Where do I apply? Visit the portal on the SBA website for more information.
- What if I’ve already applied? The SBA says previous applications will continue to be processed on a first-come, first-served basis.