EIDL Loans
About This Lesson
In this lesson, we’re going to cover the following:
- Economic Injury Disaster Loan (EIDL) & Advance
- Eligibility
- Ineligible entities
- Terms
Resources
https://www.sba.gov/size-standards
Full Video Transcript
What’s going on and welcome to this module, EIDL Loans. So these loans really came out during the COVID-19. So it depends upon when you’re watching this module. These loans may or may not still be around, but assuming they’re still around, I would highly recommend taking advantage of them because they are really competitive. So here’s what we’re going to cover. So, number one, what is the Economic Injury Disaster Loan and Advance. The eligibility for these loans and eligible entities, the terms, and that’s essentially it. So there’s a few things to understand about this. So Economic Injury Disaster Loans. So really, the way they work is the SBA economic injury disaster loan provides vital economic support to small businesses to help overcome a temporary loss of revenue that they’re experiencing as the result of the COVID-19 pandemic.
So this program is for any small business, with less than 500 employees, including sole proprietorships, independent contractors, and self-employed persons, private non-profit organizations, or 501 (c) or 19 veterans organizations affected by COVID-19. Now businesses in certain industries that have more than 500 employees, ff they meet the SBA size standards for those industries, they may still typically be available to take advantage of this particular EIDL or Advance. Now in response to the coronavirus or COVID 19 pandemic, small business owners of all, all across the United States, Washington DC and US Territories can apply for an economic disaster loan advance up to $10,000. And as of the recording of this, I think this event is no longer available, but that was available for you. So this advantage would provide economic relief to businesses that are currently experiencing temporary loss in revenue and funds will be made available to following a successful application.
And this loan advance would not have to be repaid. So I didn’t get a chance to take advantage of this. I didn’t qualify, but some people may still, and I still recommend attempting to, if you can. Just type in SBA. I would just type in EIDL Advance and see if it’s still available. Now eligibility for the loans. So applicants must have a business with no more than 500 employees. The applicant is an individual who operates under a sole proprietorship or with, with, or without employees. Forgot the w there. It’s going to drive me crazy. Let me just go ahead and put that there. All right. Nice and easy. Okay? And then also, the applicant must, is cooperative to not have more than 500 employees. And then the applicant is an employee, has an employee. Applicant is an employee stock ownership plan as defined by the US State with. If you do, if you have us state code 632 with, with not more than 500 employees.
So these are like the eligibility. So you don’t necessarily have to have an Aesop to get one of these. I didn’t have one, but it’s essentially saying, if you do have of those, you can’t have more than 500 employees. Now, when we keep going with the specifics here, the applicant is a tribal, small business concern as described by the 15 USC 657, A, B to C, not to have more than 500 employees, or the applicant is a business, including agricultural cooperative, enterprise nursery or producer of cooperative. That is a small business size standards right here. And it’s got that small business size standard. And we’ll include that link below. And the applicant is a business with not more than 500 employees under the SBA size standards. And again, we’ll include that link right below. So the applicant, if you’re a non-profit organization as a non government agency or entity that has currently effective ruling letter by the IRS with the tax ramifications of a 501 C, D or E by the IRS internal revenue code of 1954.
So you want to basically have the documentation proven that you are a non-profit organization, and you have that evidence by the state that is a non revenue producing organization or entity or a non-profit organization organized doing business under state law or a faith based organization. All right? Now in eligible entities. So applicants that is not engaged in any illegal activity. So, as federal, as defined by federal guidelines. So no principal applicant with more than the 50% or greater ownership interests, more than 60 days delinquent on child support obligations. So if you have one, the 50% in the business and you’re delinquent 60 days, you won’t be able to eligible. Applicant is not an agricultural enterprise (e.g., A farm) or other Aqua cultural enterprise, agricultural cooperative or nursery. And then those are like essentially ineligible entities. And additionally, applicant does not drive more than one-third of gross revenue from legal gambling activities.
Not in the business of lobbying. Cannot be a state local or municipal government entity and can not be a member of Congress. So these are all ineligible entities. And then the terms, typically you can borrow up up to 2 Million for, to cover operating expenses. And you have a 30-year term at 3.75% interest rate. This is essentially free money. I even got one of these. Payments are deferred for 12 to 24 months. And, yeah, so these are the terms. So these are really, really powerful loans. If you could still take advantage of one, I would highly recommend doing so if you’re a small business, I do know that the minimum requirements is going to be a 680, FICO score with Experian, and they’re going to pull it. It used to be 630, but I went up to 680. So you want to make sure you have at least a 680 FICO score. And because it’s an advance loan,
the SBS as FICO score may or may not come into account, because again, this is for the COVID pandemic. So they understand that people’s situations may have changed somewhat, but you still want to have a strong personal credit score, but these are the EIDL advanced loans. So you want to take advantage of these, if you still can use the links below.