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How to Apply for an EIDL?
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The Small Business Administration (SBA) is a government-funded program that provides many options for funding for small businesses. Funding options include loans, investment capital, disaster assistance, bonds, and grants. This article discusses what is a 7(a)...
Suppose your business has been struggling due to an economic disaster. In that case, you may be eligible for an Economic Injury Disaster Loan (EIDL) from the Small Business Administration (SBA). Economic disasters may include events like floods, hurricanes, earthquakes, tornadoes, or the current COVID-19 pandemic. This blog post will provide information on how your business may be eligible and how to apply for an EIDL.
What is an EIDL?
The EIDL program provides low-interest loans of up to $500,000 to small businesses and non-profit organizations that have suffered an economic injury due to a declared disaster. Further, the EIDL program is available to small businesses, agricultural cooperatives, and most private non-profits that have suffered a substantial economic injury.
Your business’s economic injury and financial need will determine the loan amount. Further, if you need additional financial assistance, you may also qualify for a physical disaster loan. SBA can give up to $2 million to meet your business’s financial expenses caused by an economic injury disaster and a physical disaster.
The EIDL can help pay for working capital and everyday expenses such as health care benefits, rent, utilities, and fixed debt payments. Additionally, the interest rate will not exceed 4%, and you have up to 30 years to repay the loan. Further, if your EIDL is over $25,000, you will need to provide collateral. Real Estate is usually preferred.
In response to COVID-19, small business owners, including agricultural businesses and non-profit organizations in all U.S. states and territories, were able to apply for the COVID-19 (EIDL). However, as of January 2022, the SBA is no longer accepting new applications.
They will continue to accept requests for increases, reconsideration, and appeals. Therefore, if your business already applied for or received a COVID EIDL loan, you can still request additions or reconsiderations. Further, the maximum amount of the loan increased from $500,000 to $2 million. This means that your business may be able to ask for more if the initial amount given was not enough to cover total expenses related to COVID-19.
Checking Eligibility When You Apply for an EIDL
To check if your business is eligible for an EIDL loan, you can visit the SBA’s Disaster Loan Assistance page. Suppose the SBA has issued a disaster declaration in your area. In that case, your business may be able to receive financial assistance. Whenever a disaster hits a specific location, SBA will list it on this webpage. Continue to check this page often because the SBA will continually update as more information becomes available.
Remember that eligibility for an EIDL includes small business owners, agricultural businesses, and non-profit organizations. If you own a small business and have suffered economic injury, you may qualify for an EIDL.
Here are a few things to consider before applying:
- Substantial economic injury means your business cannot pay its daily operating expenses.
- The EIDL provides working capital to help small businesses impacted by a disaster. This means the loan will help your business survive until things go back to normal for your business.
- Additionally, the SBA will determine your eligibility when they understand that your business cannot get credit from somewhere else.
How to Apply for an EIDL
Visit the SBA’s Disaster Loan Assistance page to apply for an EIDL.
The first step is to complete and submit the online application. Additionally, you will be required to provide documentation to support your loan request, including tax information, business licenses, and resumes of key personnel. You will need to complete the IRS Form 4506-T and upload it with your application. This permits the IRS to provide SBA with your tax return information.
Once you have submitted your application, an SBA inspector will assess the cost of damage.
The loan process can take several weeks. Therefore, it’s essential to apply as soon as possible. If you have any questions or need help with your application, don’t hesitate to reach out to a Business Lawyer in Texas for assistance.
Why hire a Business Lawyer in Texas?
There are lots of variables involved with the SBA and the EIDL. A business lawyer in Texas will give you the guidance you need. Further, they will determine whether your business qualifies for the loan and can explain the entire process from start to finish.
Business lawyers in Texas are experts in economic injury disaster loans. Additionally, they can help ensure your application is approved. Dooley Noted Law is familiar with the entire process. We can guide you through it, providing the best chance to receive the loan. Moreover, we can help you gather all the necessary documentation and paperwork required for your application.
Don’t hesitate to reach out and schedule a free consultation!
The contents of this post, and the posting and viewing of the information on this post, should not be construed as, and should not be relied upon for, legal advice in any particular circumstance or fact situation. An attorney should be contacted for advice on specific legal issues.
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