{"id":4997,"date":"2021-03-22T13:51:00","date_gmt":"2021-03-22T19:51:00","guid":{"rendered":"https:\/\/web.blockadvisors.com\/?p=4997"},"modified":"2022-11-21T15:41:48","modified_gmt":"2022-11-21T21:41:48","slug":"how-economic-injury-disaster-loans-can-help-small-businesses","status":"publish","type":"post","link":"https:\/\/www.blockadvisors.com\/resource-center\/small-business-tax-prep\/how-economic-injury-disaster-loans-can-help-small-businesses\/","title":{"rendered":"What is the Economic Injury Disaster Loan and how can it help small businesses?"},"content":{"rendered":"\n

Editor\u2019s Note: <\/strong>The article below was originally published on September 3, 2020. It includes updates from the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act and American Rescue Plan Act. <\/em><\/p>\n\n\n\n

Last spring, Congress passed the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act<\/a>, a sweeping new law created to help individuals and small businesses who are suffering financially by the coronavirus pandemic. A significant part of the act is the Economic Injury Disaster Loan, or EIDL.<\/p>\n\n\n\n

While this small business loan has been around for some time, the Small Business Administration (SBA) expanded eligibility for businesses impacted by COVID-19 recently.<\/p>\n\n\n\n

Read on and we\u2019ll walk you through what funding is currently available, its application process, and requirements so you can figure out if it\u2019s a good fit for your small business.<\/p>\n\n\n\n

What is the history of the Economic Injury Disaster Loan (EIDL)?<\/h2>\n\n\n\n

As millions of businesses quickly pivoted into the \u201cred\u201d post-virus outbreak, loans such as this one could be a saving grace.<\/p>\n\n\n

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\"economic<\/figure>\n<\/div>\n\n\n

The Economic Injury Disaster Loan is a small business loan from the SBA. Historically, it has been used for disaster areas from non-farm, private-sector disaster losses. In 2020, it\u2019s been promoted as a key government small business loan to use for the economic effects of the Coronavirus outbreak as part of the CARES Act.<\/p>\n\n\n\n

The CRRSA, which was passed in December of 2020, provided a Targeted Economic Injury Disaster Loan (EIDL) Advance<\/a> payment of up to $10,000 for applicants located in low-income communities who previously received an EIDL Advance for less than $10,000, or those who applied but received no funds due to lack of available program funding, including shuttered venue operators.<\/p>\n\n\n\n

The American Rescue Plan Act, which was passed in March 2021, has extended the coverage. In fact, the Act approved an additional $15 billion for targeted EIDL advance payments, including $5 billion for Supplemental Targeted EIDL Advance payments of $5,000 for those hardest hit. To be eligible the business must have suffered an economic loss greater than 50% and it cannot have more than 10 employees.<\/p>\n\n\n\n

The coverage period for emergency EIDL advances is through Dec. 31, 2021.<\/p>\n\n\n\n

Economic Injury Disaster Loan eligibility<\/h2>\n\n\n\n

Wondering what the Economic Injury Disaster Loan eligibility is? Here\u2019s more insight\u2026<\/p>\n\n\n\n

Any business, cooperative, or Employee Stock Ownership Plan with 500 or fewer employees and all sole proprietors, independent contractors, and private non-profits could apply to obtain this Small Business Administration loan.<\/p>\n\n\n\n

(Some businesses with 500 or more employees may qualify. Refer to the SBA Table of Size Standards<\/a> to see if your industry qualifies with a higher amount of employees.)<\/p>\n\n\n\n

To be eligible for EIDL assistance, your small business must also have:<\/p>\n\n\n\n