EIDL Loan Applications Reopen
Economic Injury Disaster Loan (EIDL) applications reopened from all qualified small businesses, including agricultural businesses, and non-profit organizations but you must move quickly, it is unclear how long they will continue accepting applications. The EIDL Advance, a grant (not a loan), has already been discontinued because all funds have been disbursed and there are no more funds available.
Here’s what you need to know about EIDL:
- Not forgivable. You have up to 30 years to repay the loan at an interest rate of 3.75% for businesses or 2.75% for nonprofits.
- 1 year grace period. You will have 12 months before you must make your first payment.
- Interest accrues immediately. Although you are not required to make a payment until 12 months after you take out the loan, interest will begin accruing immediately.
- Approval is relatively quick. There are reports that the turnaround for approval takes only 2 – 3 weeks. But it’s important that you submit all paperwork promptly and fill out your application quickly to avoid delays.
Restrictions On How You Use an EIDL Loan
The SBA has provided a detailed overview of the EIDL loan terms and restrictions: https://www.sba.gov/sites/default/files/articles/EIDL_and_P3_4.1.2020_FINAL_2pm.pdf
It’s important to note that “double dipping” is not allowed for those businesses that have both EIDL and PPP loans. You cannot pay for the same type of expense from both loans. For example, if you are using the PPP loan to cover payroll, you cannot also use the EIDL to cover payroll. But you are for example allowed to use PPP for payroll expenses while using EIDL to pay for shipping supplies.
Do you have questions? Contact the Seattle bankruptcy and business law attorneys at Wenokur Riordan PLLC today at (206) 724-0846 to discuss your situation.