Small Business Administration Economic Injury Disaster Loan Program and Application Process
U.S. SBA Economic Injury Disaster Loan (EIDL) Summary for Small Businesses and Nonprofits
The public health emergency resulting from the Coronavirus/COVID-19 pandemic is causing unprecedented challenges to small businesses in many industries. To assist small businesses suffering substantial economic injury as a result of the Coronavirus pandemic, the U.S. SBA is offering small businesses operating in certain designated states, including Virginia, low-interest federal disaster loans for working capital, under the Coronavirus Preparedness and Response Supplemental Appropriations Act recently passed by the U.S. Congress and signed into law by the President.
In response to a request from Virginia Governor Ralph Northam, the U.S. SBA issued an Economic Injury Disaster Loan assistance declaration as to all counties and cities in Virginia, on March 19, 2020. This EIDL assistance declaration makes loans available statewide to small businesses and private, non-profit organizations to help address economic injury to such small businesses resulting from the Coronavirus/COVID-19 pandemic; provided that such businesses and non-profit organizations have suffered a substantial economic injury as a result of a temporary reduction in revenue caused by the Coronavirus/COVID-19 pandemic.
Although the traditional essential elements of eligibility for the EIDL program are a small business’s inability to obtain credit through the private market and the small business’s suffering actual “substantial economic injury” that would qualify it for an EIDL loan, at present, those eligibility requirements have been relaxed by the federal government. Thus, small businesses and non-profits negatively affected by the Coronavirus/COVID-19 pandemic disaster are not required pursue alternate sources of credit through contacts with traditional private lenders, or exhaust available credit before applying for an EIDL. Instead, for the foreseeable future Small Businesses adversely affected by the Coronavirus/COVID-19 pandemic are encouraged to apply for private loans from traditional lending sources, like banks and credit unions, and EIDL loans from the U.S. SBA at the same time.