EIDL loans from the Small Business Administration are starting to be filled following a severe backlog caused by the number of applicants for it and Payroll Protection Program (PPP) loans backed by the SBA. It may or may not be a great source of financing depending on your access to debt capital and liquidity.
The terms are:
- Deferred payments for 12 months
- 3.75% interest for 30 years
- No prepayment penalties
- Interest accrues as soon as funds are received
- Collateral includes all tangible and intangible property of the borrower
- An initial advance of $1,000 per employee that does not have to be repaid
- Borrower to use proceeds as capital to recover from the disaster
- You have two months to close on the loan following Loan Authorization and Agreement
- Use is limited to disaster damages not covered by insurance
- Keep records related to the money for the most recent five years