Economic Injury Disaster Loan (EIDL) + Emergency Advance

Please note: Guidefitter has aggregated all information from external sources. This should not be taken as legal advice. A huge thank you to state outfitter & guide associations, industry associations, and others who are taking the time to communicate with their community. Together we will get through this. Resources are linked throughout the post & at the bottom of this page.

OVERVIEW:

The Loan:
The Small Business Administration (SBA) offers low interest loans to businesses, renters, and homeowners located in areas affected by declared disasters. In response to the COVID-19 pandemic, all regions in the US have been deemed affected by a declared disaster, and thus virtually any small business in the United States can consider this loan.

The Advance:
The EIDL Emergency Advance can provide up to $10,000 of immediate economic relief to businesses that are currently experiencing temporary difficulties due to Coronavirus. This advance will provide economic relief in as little as three days of an approved application to businesses that are experiencing a temporary loss of revenue.

EIDL Resources

Learn more about the EIDL Emergency Advance from the SBA here.
See a great Q&A about EIDL from Forbes here.

Q&A:

Who can apply?
Any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501c19 veterans organizations affected by COVID-19.

How much can I request?
An EIDL loan can be up to $2 million. Loans are based on your “actual economic injury” as determined by the SBA, subtracting any recoveries such as insurance proceeds. You can request an Emergency Advance up to $10,000 that may be forgivable.

When will I see funds?
It may take a few weeks to process your application and for you to receive the funds. The EIDL Emergency Advance funds will be made available within days of a successful application, and this loan advance will not have to be repaid if used appropriately.

Can I apply for more than one kind of loan?
If you have already received an EIDL (between January 31, 2020, and April 3, 2020), you can still apply for a PPP loan so long as you use them for different expenses. You can also refinance an EIDL into a PPP loan, but note that the $10,000 Emergency Advance will be subtracted from the PPP forgiveness amount.

I know that PPP loans can be forgiven. What about EIDL (other than the advance)?
The short answer is no, outside of that Emergency Advance. The loan advance will be forgiven if it is spent on paid leave, maintaining payroll, mortgage, or lease payments. An EIDL may be forgiven if it is refinanced under a PPP loan depending on the date the EIDL was taken out (between 1/31/2020 and 4/3/2020).

Interest:
Currently, due to COVID-19 the EIDL interest rate is 3.75% for small businesses and 2.75% for nonprofits.

Maturity:
Maturity date can be up to 30 years.

Is there a deadline to apply?
You must apply no later than December 16, 2020, in most states.

What can I use the funds for?
How you can use the funds is pretty broad, although you cannot double-dip. For example: you cannot use the EIDL funds for qualified sick and family leave wages if you’re taking a tax credit for those costs under the Families First Coronavirus Response Act. You also cannot use an EIDL to refinance pre-existing debt or pay dividends.

Do I need collateral?
Loans of $25,000 or less do not require collateral.

Do I need a personal guaranty?
A personal guaranty is waived for loans up to $200,000 through December 31, 2020.

What is the application process?
Applying for an EIDL is very similar to applying for any other loan. You have to provide your financials, however loans can be based on your credit score so a first year tax return is not required. You must, however, agree to let the SBA to review your tax records.

Where & how do I apply?
Complete the application .here.

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Additional Resources:

American Outdoors Association - COVID-19 Guidance
American Outdoors Association - Webinar Recording (March 27)
Idaho Outfitters & Guides Association
IRS Tax Relief
Johns Hopkins University
Outdoor Industry Association - Webinar Recording (April 2)
Outdoor Industry Association - The Power of the Outdoors
Paycheck Protection Program: Here’s What You Need To Know (April 3)
Small Business Administration - Disaster Loan Assistance
Small Business Administration - PPP Loan
Small Business Development Center (SBDC) Network