Economic Injury Disaster Loans

For Coronavirus Related Economic Disruptions

SBA Economic Injury Disaster Loan Program

U.S. Small Business Administration –Illinois District

Declaration process

• Governor’s Certification/Request
• SBA Administrator Approves Declaration

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Type of loan

• Working capital loan
• Used to pay business expenses

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Economic Injury Disaster Loan - Terms

U.S. Small Business Administration –Illinois District

Working Capital Loan Program

• Eligible entities may qualify for loans up to $2 million.
• The interest rates for this disaster are 3.75 % for small businesses

2.75 % for nonprofit organizations

• Terms up to 30 years
• First payment deferred for one year

Eligibility

• Based on the size (must be a small business)
• Type of business
• Financial resources

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Economic Injury Disaster Loan - Terms

U.S. Small Business Administration –Illinois District

What businesses are eligible to apply?

• small businesses
• small agricultural cooperatives
• small aquaculture businesses
• most private non-profit organizations

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How can I use the loan funds?

• Fixed debts
• Payroll
• Accounts payable
• Other bills that could have been paid had the disaster not

occurred

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What defines small business?

U.S. Small Business Administration –Illinois District

Size Standards

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Traditional Industry Size Max - NAICS

• Retail or Service - $7 Million
• Manufacturing – 500 Employees
• Wholesale - 100 Employees

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SBA’s Economic Injury Disaster Loan Basics

U.S. Small Business Administration –Illinois District

What is the criteria for a loan approval?

Credit History-Applicants must have a credit history acceptable to SBA.

Repayment –SBA must determine that the applicant business has the ability to repay the SBA loan.

Eligibility- The applicant business must

• be physically located in a declared county
• Have suffered working capital losses due to the declared disaster

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Economic Injury Disaster Loan Terms

What are the collateral requirements?

• Economic Injury Disaster Loans over $25,000 require collateral.

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• SBA takes real estate as collateral when it is available.

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• Lack of collateral is not a reason for decline.

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U.S. Small Business Administration –Illinois District

SBA’s Working Capital Loans are Different

from Other SBA Loans

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SBA’s Economic Injury Disaster Loan (EIDLs) funds come directly from the

U.S. Treasury.

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Applicants do not go through a bank to apply. Instead apply directly to

SBA’s Disaster Assistance Program at: DisasterLoan.sba.gov

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There is no cost to apply.

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There is no obligation to take the loan if offered.

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The maximum unsecured loan amount is $25,000.

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Applicants can have an existing SBA Disaster Loan and still qualify for an

EIDL for this disaster, but the loans cannot be consolidated.

U.S. Small Business Administration –Illinois District

Basic Filing Requirements

U.S. Small Business Administration –Illinois District

• Completed SBA loan application (SBA Form 5).
• Tax Information Authorization (IRS Form 4506T) for the applicant, principals and affiliates.
• Complete copies of the most recent Business Federal Income Tax Return.
• Schedule of Liabilities (SBA Form 2202).
• Personal Financial Statement (SBA Form 413).
• Other Information may be requested.

*Although a paper application and forms are acceptable, filing electronically is easier, faster and more accurate.

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Additional Filing Requirements

U.S. Small Business Administration –Illinois District

Other information that may be requested:

• Most recent personal Federal income tax returns including all schedules, of for principals, general partners or managing member, and affiliates.
• If the most recent Federal income tax return has not been filed, a year-end profit-and-loss statement and balance sheet for that tax year .
• A current year-to-date profit-and-loss statement .
• Additional Filing Requirements (SBA Form 1368) providing monthly sales figures. (This is especially important for Economic Injury Disaster Loans.)

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Ineligible Entities

U.S. Small Business Administration –Illinois District

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What are some of the businesses that are ineligible for an Economic Injury Disaster Loan?

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• Agricultural Enterprises -If the primary activity of the business (including its affiliates) is as defined in Section 18(b)(1) of the Small Business Act, neither the business nor its affiliates are eligible for EIDL assistance.
• Religious Organizations

• Charitable Organizations whose primary objectives are philanthropy and

social well being

• Gambling Concerns (Ex: Concerns that derive more that 1/3 of their

annual gross revenue from legal gambling activities)

• Casinos & Racetracks (Ex: Businesses whose purpose for being is gambling

(e.g., casinos, racetracks, poker parlors, etc.) are not eligible for EIDL

assistance regardless of 1/3 criteria above.

How to Apply

U.S. Small Business Administration –Illinois District

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SBA’s Customer Service Representatives are ready to serve.

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• Electronic Loan Application (ELA) at https://disasterloan.sba.gov/ela.
• Paper loan applications can be downloaded from www.sba.gov/disaster. Completed applications should be mailed to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155 (Not recommended).
• Disaster loan information and application forms may also be obtained by calling the SBA’s Customer Service Center at 800-659-2955 (800-877-8339 for the deaf and hard-of-hearing) or by sending an email to disastercustomerservice@sba.gov.

Assistance From SBA and Partners

U.S. Small Business Administration –Illinois District

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Free assistance with reconstructing financial records, preparing financial statements and submitting the loan application is available from any of SBA’s partners: Small Business Development Centers (SBDCs), SCORE, Women’s Business Centers (WBC), and Veteran’s Business Outreach Centers and local Chambers of Commerce.

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For the nearest office, visit: https://www.sba.gov/local-assistance

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Illinois District is hosting two training sessions daily (11a and 3p)

• Go to www.sba.gov/il for more information.

Tips Before You Submit

U.S. Small Business Administration –Illinois District

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Recheck the filing requirements to ensure that all the needed

information is submitted.

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The biggest reason for delays in processing is due to missing information. Make sure to complete all filing requirements before submitting the application and forms.

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If more funds are needed, applicants can submit supporting documents and a request for an increase. If less funds are needed, applicants can request a reduction in the loan amount.

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If the loan request is denied, the applicant will be given up to six months in which to provide new information and submit a written request for reconsideration.

Other Resources

U.S. Small Business Administration –Illinois District

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SBA Access to Capital Programs (7a/504)

• SBA Offering flexibilities including:
• 6-month payment deferment

Frequently Asked Questions

U.S. Small Business Administration –Illinois District

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• I’m having technical problems.

Try deleting your cookies and closing and reopening your browser. The loan application website is undergoing maintenance to improve your experience.

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• My business just started recently. Am I eligible?

There is no minimum time that a business must have been open, but you must demonstrate that the disaster caused economic injury.

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• What's the minimum credit score?

There is no minimum cutoff number. Credit score is considered, but our underwriters use a number of factors in evaluating applications.

Frequently Asked Questions

U.S. Small Business Administration –Illinois District

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• What if I own more than one business? What if my business has locations in more than one state?

Apply in the state where your headquarters or primary location is. Additionally, if you have two similar businesses, apply together. If you have two different businesses – say, a restaurant and a staffing company -- apply separately.

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• What collateral/personal guarantee is required?

Personal guarantees are required. If collateral is available, it must be offered for loans over $25,000, but a lack of collateral isn’t a reason for a loan to be denied. Real estate is the preferred form of collateral, but machinery, equipment, and inventory will also be accepted.

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• What is the turnaround time?

From application to funds being disbursed, we expect about one month.

Frequently Asked Questions

U.S. Small Business Administration –Illinois District

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• Where do I ask for how much money I want?

There is a blank narrative section on the loan application where you can indicate how much you would like, but SBA will make a determination based on your past sales and future projections. If you’re approved, there will be an opportunity to request more funds later if needed.

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• How will the stimulus legislation affect my loan?

We’re not able to share details on the pending legislation, simply because any number of items could be added or deleted between now and when it is signed. The Economic Injury Disaster Loan program is available to help you now, and there’s no obligation to accept the loan in the future if your circumstances change.

Any Questions?

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U.S. Small Business Administration –Illinois District Office

More information concerning SBA and its programs: www.sba.gov/disaster www.sba.gov/coronavirus

www.sba.gov/il

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Additional help:

Illinois District Office

(312) 353-4528 | Illinois.DO@sba.gov

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SBA Disaster Customer Service Center, 7a to 9p ET seven days a week

(800) 659-2955 | disastercustomerservice@sba.gov