COVID-19 Economic Injury Disaster Loan (EIDL) | Finance Strategists

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on March 29, 2023

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An Economic Injury Disaster Loan (EIDL) is a program by the U.S. Small Business Administration (SBA) to help businesses meet payroll and other essential expenses as they would, if only they weren't affected by a disaster, such as COVID-19.

Funds should not be used to rectify damages incurred due to the pandemic or recovery efforts. EIDLs are low-interest, fixed-rate loans that can be used to cover working capital needs such as:

  • rent or mortgage
  • utilities
  • property taxes
  • insurance
  • wages or payroll
  • business loans

The Two Kinds of COVID-19 EIDLs

In accordance with the information available on the SBA's official webpage, COVID-19 EIDLs are classified into two categories:


Through the provision of easily available and borrower-friendly finance, this federal small company loan program aids small enterprises in their efforts to recover from the economic repercussions of the COVID-19 tragedy.

You have an option of taking out a maximum loan amount of $2,000,000 and a maximum loan period of 30 years.

Businesses will pay a set interest rate of 3.75 percent, while private nonprofit organizations will pay a fixed interest rate, at 2.75 percent.

During the first two years (during which interest would accumulate), payments of principal and interest are deferred, with payments of principal and interest payable over the next 28 years.

There is no penalty for paying in advance. There are no fees charged for loans of up to $25,000, and a $ 100 filing fee is charged for more than that amount.

Borrowers who take out loans in excess of $500,000 are obliged to register a real estate lien and pay the related expenses.

For loans more than $25,000, collateral is needed, while a personal guaranty is required for loans greater than $200,000.

How to Apply for a COVID-19 EIDL

For first-time COVID EIDL applicants, follow the process outlined below to submit an application:

  • Verify your eligibility by reviewing the FAQs and Loan Eligibility section
  • Fill out the Intake Form. This helps SBA gather the information they need to process your application.
  • Sign up to establish a portal account after receiving an email invitation from the SBA.
  • Complete the portal processes and upload any necessary documentation.
  • Obtain signatures, confirmations, and other papers from the SBA as requested.

The SBA typically takes several weeks to make a decision on a loan of less than $500,000 in value.

B. Targeted EIDL Advance and Supplemental Targeted Advance

If the applicants for the previously mentioned COVID-19 Economic Injury Disaster Loan (EIDL) are also qualified to participate in this program for granting advances, they may go one step further and request up to $15,000 worth of advance from the SBA.

In that they are not expected to be repaid, these "advances" are similar to grants; however, the distinction is that they do not come with the usual conditions associated with a grant from the government.

If you are qualified, you may take advantage of the benefits of this program by first submitting an application for the COVID-19 EIDL.

You are under no obligation to accept or be accepted for the loan that is included with it.

If your company is situated in a low-income area, the SBA will contact you via email to offer you to apply for one of the advance programs.

Targeted EIDL Advance

Targeted EIDL Advance usually covers businesses such as single proprietorships, independent contractors, and private, non-profit organizations.

Agricultural firms are rendered ineligible.

Here are the basic requirements for the advance of a total of $ 10,000 to be granted:

  • You are situated in a low-income neighborhood.
  • You are able to show a revenue drop of more than 30% within an eight-week period commencing March 2, 2020, or later.
  • Your company has 300 workers or fewer.

Supplemental Targeted Advance

Supplemental Targeted Advance aims to assist recipients similar to that of the Targeted EIDL Advance, and also with the exception of agricultural firms.

This is an additional advance of up to $5,000 that may be provided if the following conditions are met:

  • You are situated in a low-income neighborhood.
  • You are able to show a revenue drop greater than 50% over an eight-week period commencing March 2, 2020, or later, in comparison to the prior year's period.
  • Your company has 10 workers or fewer.

Whether or not your region is designated as low-income may be assessed by visiting this tool map, and you can read the FAQs Regarding Targeted EIDL Advance to verify your eligibility.

When Can I Apply for COVID-19 EIDL?

Applicants have until December 31, 2021, or when funds are depleted to submit an application.

In the event of disapproval, they have up to six months from the day the application was rejected to seek reconsideration, regardless of the deadline.

Final Thoughts

Any assistance is of great help for businesses in need. When they are subject to an unforeseen catastrophe, they may not be able to obtain the necessary funds on time to keep their operations running.

The COVID-19 EIDL aims to address this issue, as well as the issue of lessening the economic loss experienced by low-income areas due to similar circumstances.

For comprehensive information, check out the SBA's page on this subject.

COVID-19 Economic Injury Disaster Loan (EIDL) FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.

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