EIDL could be the solution for your idle Business.
Through unprecedented measures the Federal Government implemented the CAREs act as a join program involving the Department of Treasure, The Federal Reserve, and the Small Business Administration to inject capital in the stretched thin small business America as well as the American consumer. The CAREs act has several measure to apply Quantitative Easing to the US economy through a $2.2 Trillion with a T stimulus package. This Stimulus package represents 10% of the US GDP and designed to alleviate the fiscal damage done to the US economy by the total shutdown of the US economy by Covid-19 also known as the Corona Virus. There are several measures to the CAREs act, but the one that stands out the most is the EIDL.
The EIDL or Economic Injury Disaster Loan program is design to give Businesses affected be the shut down an opportunity to apply for quick Cash. In an unprecedented move the SBA has chosen to directly manage and operate the EIDL program. Business owners can apply for the EIDL directly through the SBA here. The EIDL has some ground breaking changes to its structure from typical SBA loans. First off, it has the potential to be forgiven as grant. More on that below
So who can apply? Any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by COVID-19. The EIDL also waives typical SBA loan requirements like 1 Year of operation requirement and Personal guarantee for loans under $200K. For those with an Inability to get credit elsewhere or unable to provide tax returns their application may be approved based on credit score or other methods.
Those eligible businesses may qualify for a loan of up to $2 million. Interest rate is 3.75% with repayment terms of up to 30 years. "The interest rate for non-profits is 2.75%" You may also apply for an emergency loan advance of up to $10,000. If your application is accepted, these funds would become available within three days. If Your EIDL application is denied your emergency advance up to $10,000 becomes a grant and is completely forgiven. These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact.
You can also roll your EIDL loan into your PPP loan , as long as you are not using them for the same expenses. If you have an existing EIDL, that may be rolled into the PPP loan at the lower interest rate. Be aware that the loan term would be reduced to the two year term of the PPP loan. Also, if you received the $10,000 emergency loan advance “grant” and you receive a PPP loan, the amount of forgiveness on the PPP loan amount will be reduced by $10,000 for the EIDL “Grant”.
Our Hopes and Prayers are with all of the business owners affected by Covid-19. For more information and the latest updates on business news follow our blog.