What Is An Economic Injury Disaster Loan? How Federal EIDL Loans from the SBA Work

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How much do you need?
How EIDL loans work
Fast facts about SBA EIDL loans
Max | $2,000,000. |
Term | 30 years. |
Interest rate | 4% max. |
Collateral | Required if loan is over $25,000. Loans of $200,000 or less don't require owners to use a primary residence as collateral if they have other assets worth at least the amount of the loan. |
Prepayment penalties and fees | None. |
Deadline to apply | Within nine months of disaster declaration; exceptions are available for things such as illness, death, mail disruptions, military service or relocation and repair issues. |
Other important things to know about getting an EIDL loan
- To qualify, your business has to be in a declared disaster area. You can see the SBA’s list of declared disasters.
- The SBA determines how much it will lend you and how long you have to repay the loan.
- The SBA makes an EIDL loan only if it determines that you can’t get credit elsewhere.
- You can get an EIDL loan as well as a physical disaster loan from the SBA if you qualify for both. The maximum combined loan amount is $2 million.
- Insurance claims don’t have to be final for the SBA to approve an EIDL loan.
SBA COVID EIDL loan and grant programs
How to get an EIDL loan
- Apply. Fill out the application on the SBA website. You can also get an application in person at a local recovery center or by calling 1-800-659-2955 to have the SBA mail an application to you. Generally, owners will need to provide personal financial statements, business income statements, balance sheets and detailed information about the business’s fixed debts.
- Sign IRS Form 4506-T. This is part of your application, and it gives the IRS permission to give copies of your tax returns to the SBA.
- Meet with the inspector. The SBA will send an inspector to estimate the cost of damage to your business once it has your application.
- Wait for a decision. The SBA says its goal is to make a decision on an application within two to three weeks. The loan decisions are communicated in writing.
- Sign the paperwork. If your loan is approved, the SBA prepares and sends you the loan closing documents to sign.
- Receive the money. After it receives your signed closing documents, the SBA makes an initial disbursement of $25,000 within five days.
- Stay in touch with the SBA. The SBA assigns a case manager who schedules the rest of the disbursements and adjusts the loan after closing if your circumstances change.