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Economic Injury Disaster Assistance Loans (EIDLs) Now Available to Iowa Businesses

Published Saturday, March 21, 2020

Economic Injury Disaster Assistance Loans (EIDLs) are now available to Iowa businesses. Today the State of Iowa officially received a disaster declaration through the U.S. Small Business Administration. Small business owners in Iowa can now apply for a low-interest loan to help cover expenses due to the Coronavirus.

Economic injury means the business is unable to meet its obligations and to pay its ordinary and necessary operating expenses. EIDLs provide the necessary working capital to help small businesses survive until normal operations resume after a disaster. The SBA can provide up to $2 million to help meet financial obligations and operating expenses that could have been met had the disaster not occurred. Your loan amount will be based on your actual economic injury and your company's financial needs, regardless of whether the business suffered any property damage. Interest rates on EIDLs will not exceed 4 percent per year. The term of these loans will not exceed 30 years. The repayment term are determined by your ability to repay the loan.

CLICK HERE TO APPLY FOR A DISASTER LOAN

Marion Economic Development Corporation will host an informational webinar with SBA and community banking representatives this Monday, March 23rd at 11am. The webinar is open to all business. You do not need to be a member or investor of Marion Economic Development Corporation to join the  webinar. There is no cost to participate

CLICK HERE TO REGISTER FOR WEBINAR

What are SBA Economic Injury Disaster Loans?

SBA Economic Injury Disaster Loans are working capital loans to help small businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private, non-profit organizations of all sizes meet their ordinary and necessary financial obligations that cannot be met as a direct result of the disaster. These loans are intended to assist through the disaster recovery period. Details on SBA's Economic Injury Disaster Loan Program and information on how to apply for it are included below.

How to Apply for an SBA Economic Injury Disaster Loan:

Applicants may apply online, receive additional disaster assistance information and download applications at https://disasterloan.sba.gov/ela.

Applicants may also call SBA’s Customer Service Center at (800) 659-2955 or email disastercustomerservice@sba.gov for more information on SBA disaster assistance. Individuals who are deaf or hard-of-hearing may call (800) 877-8339.

For those wishing to make "paper" submissions, completed applications should be mailed to U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.

Application Filing Deadline: December 17, 2020

Disaster Loan Assistance Available:

Economic Injury Disaster Loans (EIDLs) – Working capital loans to help small businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and most private, non-profit organizations of all sizes meet their ordinary and necessary financial obligations that cannot be met as a direct result of the disaster. These loans are intended to assist through the disaster recovery period.

Credit Requirements:

  • Credit History – Applicants must have a credit history acceptable to SBA.
  • Repayment – Applicants must show the ability to repay the loan.
  • Collateral – Collateral is required for all EIDL loans over $25,000. SBA takes real estate as collateral when it is available. SBA will not decline a loan for lack of collateral, but SBA will require the borrower to pledge collateral that is available.

Interest Rates: The interest rate is determined by formulas set by law and is fixed for the life of the loan. The maximum interest rate for this program is 3.750 percent for small businesses and 2.750 percent for eligible private non-profits.

Loan Terms: The law authorizes loan terms up to a maximum of 30 years. SBA will determine an appropriate installment payment based on the financial condition of each borrower, which in turn will determine the loan term.

Loan Amount Limit: The law limits EIDLs to $2,000,000 for alleviating economic injury caused by the disaster. The actual amount of each loan is limited to the economic injury determined by SBA, less business interruption insurance and other recoveries up to the administrative lending limit. SBA also considers potential contributions that are available from the business and/or its owner(s) or affiliates. If a business is a major source of employment, SBA has the authority to waive the $2,000,000 statutory limit.

Loan Eligibility Restrictions: Noncompliance – Applicants who have not complied with the terms of previous SBA loans may not be eligible. This includes borrowers who did not maintain required flood insurance and/or hazard insurance on previous SBA loans.

Note: Loan applicants should check with agencies / organizations administering any grant or other assistance program under this declaration to determine how an approval of SBA disaster loan might affect their eligibility.

Refinancing: Economic injury disaster loans cannot be used to refinance long term debts.

Insurance Requirements: To protect each borrower and the Agency, SBA may require you to obtain and maintain appropriate insurance. By law, borrowers whose damaged or collateral property is located in a special flood hazard area must purchase and maintain flood insurance. SBA requires that flood insurance coverage be the lesser of 1) the total of the disaster loan, 2) the insurable value of the property, or 3) the maximum insurance available.

For Questions: Applicants can call SBA’s Customer Service Center at (800) 659-2955 or email disastercustomerservice@sba.gov for more information on SBA disaster assistance. Individuals who are deaf or hard-of-hearing may call (800) 877-8339.

 

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