Damage estimates from Hurricane Ian are as high as $60 billion. That doesn’t include the revenue businesses will lose due to closures, power outages, and other disaster-related problems.
The Small Business Administration (SBA) offers several types of disaster loans to help businesses recover from disasters. The funds can help cover operating expenses or repairs to your facilities.
An Economic Injury Disaster Loan (EIDL) can help you meet financial obligations like rent and health insurance. In a time of crisis, you need the loan right away. Luckily, the SBA moves relatively quickly to approve disaster loan applications.
Learn more about EIDL disaster loans and how long it takes to get approval.
How Long Does Approval Take for an SBA EIDL Loan?
The timeline for processing an application for an SBA EIDL loan can vary. It depends on how many applications the SBA is receiving. In general, you’ll get a decision within 21 days.
If your application wasn’t complete or the SBA needs more information, processing will take longer.
After loan approval, you’ll receive the funds relatively quickly. Disbursement usually takes around five business days.
How to Check the Status of Your SBA EIDL Loan
You can check your SBA disaster loan status online, by email, or by phone. You can find out if the SBA has received your application and if the review process has started.
Check Your Loan Status Online
If you submit your application online, checking your loan status through the SBA disaster loan portal is the most efficient method. You can log in using the same username and password you used for your application. You’ll be able to see the current status of your application and the date the status was last updated.
Check Your Loan Status by Email
You’ll receive updates on your SBA disaster loan status by email. You can also email the SBA to get more information about your application or the EIDL process. Send your email to the disaster loan customer service team at firstname.lastname@example.org.
Email is a good method if you have additional questions. Otherwise, using the SBA disaster loan portal will be a faster way to check your loan status.
Check Your Loan Status by Phone
You can call the SBA Disaster Assistance Customer Service Center to check your loan status. The representatives will be able to answer your questions about the EIDL program and your application.
This method can be time-consuming, though. You may need to wait on hold if the service center is trying to handle a large volume of calls.
How Is an EIDL Different from Other Disaster Loans?
The SBA offers several types of disaster loans:
- Business physical disaster
- Mitigation assistance
As their name indicates, business physical disaster loans help businesses cover physical disaster losses. These disaster loans can be used to repair or replace property like machinery, equipment, or inventory.
Mitigation assistance helps businesses modify their facilities to reduce the damage from future disasters. Mitigation loans can cover upgrades such as installing pressure-rated windows, sump pumps, or a Class A fire-rated roof.
What Does an EIDL Cover?
An EIDL provides working capital to help your business cover normal expenses like payroll, rent, utilities, and fixed debt payments. It covers financial obligations and operating expenses that your business would have been able to meet if the disaster hadn’t occurred.
An EIDL doesn’t cover physical damage to your facilities. However, you may qualify for a physical disaster loan. You can receive an EIDL and a physical disaster loan for the same declared disaster.
An EIDL doesn’t cover physical improvements or expansions to your business, either. You can apply for a mitigation loan if you want to make renovations that increase the disaster preparedness of your business.
Eligibility for an EIDL
The eligibility requirements for an EIDL are fairly broad. To qualify for a disaster loan from the SBA, your organization must be a:
- Small business
- Small agricultural cooperative, or
- Private non-profit organization
Most private non-profit organizations are eligible for an EIDL. Government agencies or entities aren’t eligible, though.
Your business must be located in a designated disaster area. The SBA lists declared disaster areas on its website.
The third main requirement is that your business must have suffered “substantial economic injury.” The SBA defines this as being unable to pay your normal and necessary operating expenses.
You are only eligible for an EIDL if the SBA determines that you can’t get credit elsewhere.
Terms and Conditions of an EIDL
When your application for a disaster assistance loan is approved, the contract will list the terms and conditions of the loan. Understanding the loan terms will help you avoid any problems during repayment.
EIDL loans have a term of up to 30 years. The term depends on your ability to repay the loan. You can pay off the loan early with no penalties.
The interest rate for an EIDL loan won’t be higher than 4%.
Loans over $25,000 require collateral. The SBA prefers real estate as collateral. Your loan officer will work with you to determine the right collateral for your loan.
How to Apply for an SBA Disaster Assistance Loan
You can apply for an EIDL online through the SBA disaster loan portal. You’ll need to create an account and verify your identity. You can then enter information about your business, like a schedule of liabilities, your most recent federal tax return, and details of your insurance policy.
Be sure to read and follow the application instructions carefully. If your application is incomplete, the processing will be delayed.
Get Help with Your Application for a Disaster Loan
Disaster loans from the SBA can help your business keep operating even when a disaster strikes. An EIDL gives you the capital to keep paying expenses like rent and utilities.
You may need to wait several weeks before getting approved. Once the government declares a disaster in your area, start the application process as soon as you can. You can check your application status conveniently online.
Cornerstone Capital Advisors is ready to work with you through the disaster loan process. Our experience will help you get the most benefit from your EIDL. We’ll help you get your business beyond recovery and back toward growth.
Contact us today for a consultation and give your business the benefit of a disaster loan.