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
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