SBA EIDL Loans Everything You Need To Know

SBA EIDL Loans Everything you need to know

Quarantines. Lockdowns. Mandated closures. Broken supply chains. Ugh. 2020 sucked for everyone. Covid-19 has been devastating to many small businesses across the US.

If your business has been struggling and you need help, you may have heard that the federal government is providing assistance to Covid-hit small businesses. You decide to start with a quick google search and are immediately bombarded with acronyms such as SBA, EIDL, CARES Act, PPP … and now your head is probably spinning.

Keep calm. We got you!

Here’s (almost) everything you need to know about SBA EIDL loans, wrapped in an easy to digest, quick-glance format. This guide covers everything you need to know to apply and receive funding from the government for your small business.

This guide is updated as of August 2021.

A brief overview of the SBA

Small Business Administration (SBA) is a government agency that helps small businesses and entrepreneurs start and grow their operations.

SBA provides resources such as training and educational resources, loans, and financial assistance during disasters to small business owners.

While in this guide we will be focusing on the Economic Injury Disaster Loan program, the SBA does offer other different loan types such as Home and Personal Property SBA Disaster Loans, Business Physical SBA Disaster Loans, and Military Reservists Economic Injury SBA Disaster Loans.

Did you know that the SBA was established on 30th July 1953?

What is an SBA EIDL loan?

EIDL (short for Economic Injury Disaster Loan) is a loan program administered by the Small Business Administration (SBA) and is designed to provide economic relief to businesses suffering substantial loss of revenue due to a natural disaster.
“Substantial” here means the business can’t meet its financial obligations such as paying necessary operating expenses such as rent, staff, etc.


  • Accounts Payable
  • Fixed Debts
  • Payroll
  • Other bills that can’t be paid because of the disaster’s impact.


  • Paying employee bonuses
  • Stakeholder/principal loan repayment
  • Owner disbursement (unless for service performance)
  • Facility expansion or relocation
  • Fixed asset purchases
  • SBA or Federal agency loan debt (except for IRS obligations)
  • Long-term debt refinancing.

EIDL loan amount and terms

EIDL loans are available for up to $500,000


  • Businesses: 3.75% fixed for 30 years
  • Private nonprofit organizations: 2.75% fixed for 30 years
  • Payment Deferral: The loan term is 30 years; payments are deferred for the first 18 months (during which interest will accrue), and payments of principal and interest are made over the remaining years. You may make prepayments at any time without penalty.


  • $0 – $25,000: No collateral required
  • $25,001 – $500,000: Security agreement (UCC-1) required on business assets (no lien on real estate unless as an accommodation to the applicant)


  • $0 – $200,000: No personal guaranty required
  • $200,001 – $500,000: All loans require a full personal guaranty from all individuals or entities owning 20% or more of the applicant business. If no single owner owns 20% or more, then at least one individual or entity must provide a full guarantee.


  • Repayment ability of for-profit businesses will be determined by the owner’s credit score (minimum of 570)
  • An acceptable credit score will satisfy the underwriting requirement for repayment ability

Does my small business qualify for an EIDL loan?

If you think an EIDL loan is right for your business, your first step should be to ensure that your business qualifies for a loan. Here are some of the requirements for an EIDL loan.

  • Only available to small businesses Is independently owned and operated According to the SBA standards and definition, the small business is:
    – Is organized for profit
    – Has a place of business in the US
    – Operates primarily within the US – or makes a significant contribution to the
    U.S. economy through taxes or use of American products, labor, or materials
  • Is independently owned and operated

EIDLs are also open to nonprofits, faith-based organizations, sole proprietors, and independent contractors.

Size standards
If your business employs 500 people or less, you are likely to be considered as a small business and therefore eligible for the loan. However, in some industries, the number of employees considered for a small business is higher.

Declared disaster
The EIDL is designed to assist businesses that have suffered working capital losses due to a declared disaster.

This means that your state must have declared a state of emergency in order to be eligible for the loan. Such a designation is common for states experiencing flooding, hurricanes, tornadoes, and other adverse weather events.

However, since the effects of the COVID-19 pandemic have been so severe, most US states have been declared to be in a state of emergency, and businesses in those states are therefore eligible to apply.

What businesses are ineligible for the EIDL loans?

Some businesses are ineligible for EIDL loans

  • Any business engaging in illegal activity as defined by the federal government
  • Any business where gambling is more than ⅓ of Annual Gross Revenue
  • Adult entertainment
  • Casinos and racetracks where main purposes is gambling
  • Pawn shops, if more than 50% of revenue is derived from interest
  • Businesses engaged in lobbying activities
  • Cannabis companies
  • Speculative businesses
  • Life insurance companies
  • Pyramid sale distribution plans
  • Government-owned entities
  • Investment/Lending Companies.

The new targeted EIDL loans

The new Targeted EIDL Advance is a grant eligible to small businesses and nonprofits in low-income communities only.

The Targeted EIDL Advance only offers grants up to $10,000 for business impacted by the COVID- 19 pandemic and don’t have to be repaid.

To qualify for these funds you have to meet the following requirements:

  • Located in a low-income community as defined by the Internal Revenue Code, section 45D (e)
  • You have suffered more than a 30% reduction in revenue during an eight week period starting after March 1, 2020
  • Previously received an EIDL advance for less than 10,000

If you meet this criteria and;

  • Received no advance due to lack of available funding and have 300 or fewer employees, you may be eligible for the Targeted EIDL Advance.

Note: Don’t confuse the new Targeted EIDL advance with the former EIDL advance, which is no longer available. You are not required to apply or do anything to receive the Targeted EIDL Advance Loan. If you qualify for the loan, the SBA will reach out to you.

How to apply for an EIDL loan

Documents to apply for an EIDL loan

Here are some of the documents you’ll require to apply for an EIDL loan:

  • 2019 Corporate Tax Return
  • Drivers License for all owners (Front and Back in color)
  • Voided check for the business checking account.

Frequently asked questions (FAQs)

What is the deadline to file an application?

The last day that applications may be approved is December 31, 2021. Be sure to file your application as soon as possible to allow processing time for approval.

How soon can I expect the funds?

It takes a minimum of 21 days for the EIDL to be processed by the SBA. The actual length depends on whether there are questions or any additional information required.

Is an EIDL loan forgivable?

No. EIDL loans are not forgivable.

Where should I apply for the EIDL?

You can directly apply for your SBA EIDL loan here.

What happens if my EIDL application is declined?

If your application is denied, you can submit a request for reconsideration. Give us a call at 888-445-1028 or email us at [email protected] and we can guide you on the way forward.

I was recently declined for EIDL due to my credit being too low. Can I still qualify for other business financing?

YES! We are a full service DIRECT LENDER and have many options available besides the SBA EIDL. Fill out the application and one of our funding specialists will reach out to you.

Can I apply for EIDL loan if I already received a PPP loan?

Yes. Borrowers can apply for both the PPP and EIDL, although funds from both cannot be used for the same purpose.


The decision to apply for funding isn’t easy and, therefore, should be done with care. We hope this guide gives you a quick reference guide to SBA EIDL loans for your small business. This guide is updated as of August 2021.


Thor Capital Group is a direct lending firm that offers uncommonly flexible options for working capital to small and mid-sized businesses in need of financing to improve or grow their well earned place on the street.

We place a high value on mutual trust and transparency while providing businesses with simple, quick, and customized financial solutions while leveraging state-of-the-art technology platforms.

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