SBA EIDL Loans – What Are EIDL Loans and How Do I Apply For One?

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If your business has suffered economic harm due to the COVID-19 pandemic, you could potentially qualify for an EIDL. These loans offer several advantages such as low-interest rates and a simple application process. Unfortunately, other SBA COVID-19 relief programs (like PPP and RRF) have recently come to an end or run out of funding, leaving many businesses and nonprofit organizations without assistance.

What is SBA EIDL Advance?

An EIDL Advance is a type of loan advance available for certain businesses. These advances can be an ideal solution for struggling small businesses that require extra funding but haven’t yet qualified for disaster loans.

  • This program was established to assist small businesses that are facing hardship to receive emergency funds to cover business expenses and accelerate their recovery process. The Small Business Administration (SBA) has joined forces with lenders to offer these non-taxable loans.
  • The Targeted EIDL Advance grant offers small businesses up to $10,000 in fast, secure funding that does not need to be repaid. Funding amounts are determined based on the number of employees a business has.
  • To be eligible for the Targeted EIDL Advance, your business must be located in a low-income community and demonstrate that it suffered an economic loss of 30%+ due to COVID-19. To prove this, please provide documentation of gross monthly revenue during that timeframe.
  • If your business qualifies for a Targeted EIDL Advance or has already received an EIDL loan, you can also apply for a Supplemental EIDL Advance of $5,000 – an additional grant of $5,000.
  • As of May 6, 2022, the SBA EIDL Advance program is no longer funded and they will no longer accept new applications for Targeted EIDL Advance or loan increase requests or reconsideration of previously declined applications. Furthermore, invitations have not been sent out to EIDL applicants who received an Advance of less than their maximum 2020 allotment.

How do I apply for a SBA EIDL Advance?

If your small business in the United States has suffered due to the coronavirus pandemic, you could potentially qualify for an SBA EIDL Advance. These advances offer emergency funding without having to be repaid and can serve as a form of emergency financing.

The Small Business Administration (SBA) offers two programs to assist businesses with these losses: Targeted EIDL Advance and Supplemental Targeted Advance. Both require businesses to meet eligibility criteria and be situated in low-income communities.

Applying for the targeted EIDL Advance loan online through SBA’s disaster loan assistance website is possible. Depending on how much information you provide, the application process may take two hours and ten minutes to complete.

To determine your eligibility, you must fill out the Small Business Administration’s (SBA) online mapping tool to confirm if your business is located in a low-income community. Additionally, you must present valid photo identification, provide the canceled check from a legitimate business bank account and electronically sign an IRS Form 4506-T (Business Tax Transcript).

What are the Eligibility Requirements for an EIDL Advance?

The EIDL Advance program is available to small businesses and non-profit organizations located in low-income communities that received a COVID-19 Economic Injury Disaster Loan or previously applied for an EIDL grant but either did not receive any funding or only partial support. If your business meets the eligibility criteria, the Small Business Administration will contact you via email to let you know if you can benefit from an EIDL Advance.

  1. To be eligible for an EIDL Advance, a business must demonstrate that it has suffered an annualized gross monthly revenue loss of 30%+ due to COVID-19 during the last two months and operates in a low-income community with 10 or fewer employees.
  2. If you qualify for an EIDL Advance, your application must be submitted by December 28, 2021, to ensure that you do not lose the grant from the SBA.
  3. In order to apply for a loan from the Small Business Administration (SBA), you will need your tax information for the past two months on IRS Form 4506-T (required for US residents), which should be signed electronically on behalf of the SBA. Furthermore, you may be asked for your business credit score as well.
  4. For further details about these developments, please consult this guide from the SBA. Alternatively, you can register for our webinars.
  5. In addition to the EIDL Advance, SBA is offering two new loans for small businesses affected by the coronavirus. These COVID-19 EIDL loans come in amounts up to $2 million and cover two years of economic hardship.

What are the Eligibility Requirements for an EIDL Loan?

The Small Business Administration (SBA) offers the EIDL loan program as a federal disaster loan specifically tailored for small businesses that have experienced losses of revenue. Under this federal disaster loan program, businesses are only allowed to use these funds for approved purposes and must save receipts for all purchases made with EIDL funds.

  1. To determine how much of your business’s financial losses you may be eligible to recover with an EIDL, the SBA takes your gross revenue and cost of goods sold for 2019 as two figures and subtracts them to determine how much assistance you are eligible for.
  2. Once you’ve determined your eligibility, apply for an EIDL loan on Skip’s dashboard or fill out our online form. All that’s needed is your tax return and TIN number, as well as the address of your business.
  3. Although most small businesses are eligible to apply for an EIDL, some may not be eligible based on certain factors. For instance, if you own more than 20% of your business or are a sole proprietor, then you must provide a personal guarantee in order to be approved.
  4. Another factor that may impact your eligibility is if you have other outstanding Small Business Administration (SBA) loans. In such cases, lenders may grant deferment of those payments for up to 12 months after a disaster declaration has taken place.
  5. However, if your EIDL loan isn’t paid off within these specified times, you could be responsible for paying interest on the delinquent portion. Before deciding to defer, consult with a tax advisor to understand how it might impact your tax situation.
  6. In the meantime, SBA provides a Hardship Accommodation Plan for borrowers experiencing short-term financial strain. Under this program, borrowers may make partial payments of 10% of their regular monthly payment for up to six months.

How do I get an EIDL Loan?

If you’re seeking an EIDL loan to assist your business with recovery, it is essential to be aware of the program’s qualifications. Fortunately, applying is straightforward and should take no more than two hours.

Applying for an EIDL is done online through the SBA’s portal, where you’ll receive an email invitation after completing your intake form. After that, all necessary documents including tax information must be submitted in order to finalize the process.

Once your application is complete, you’ll receive a loan quote that helps determine how much funding your business may qualify for. The amount awarded depends on your business’s financial statements and how many employees are employed.

An EIDL loan carries an interest rate of 3.75% for small businesses and 2.75% for private nonprofit organizations, with terms extending up to 30 years. The loan is interest-only during the first year; after that, accruing charges on the principal amount begin.

After the initial year, you must pay interest on the entire loan amount each month; however, you have the option to defer repayment until later. Furthermore, SBA will notify you if your business qualifies for an increase in loan amount if eligible.

Updated May 6, 2022: Unfortunately, this program has reached its capacity and no new applications are being accepted. Nonetheless, you can learn more about the program in case it reopens in the future.


SBA EIDL Loans offer several advantages such as low-interest rates and a simple application process. Unfortunately, other SBA COVID-19 relief programs (like PPP and RRF) have recently come to an end or run out of funding, leaving many businesses and nonprofit organizations without assistance.