The Small Business Administration (SBA) is currently providing low-interest Economic Injury Disaster Loans (EIDLs) to help businesses recover from Coronavirus (COVID-19).
In times of crisis, The Small Business Administration (SBA) can be a valuable resource for small businesses. The SBA is currently providing low-interest Economic Injury Disaster Loans (EIDLs) to help businesses recover from Coronavirus (COVID-19).
Small businesses may apply for a maximum business loan of $2 million, which may be used exclusively to address economic injury. Funds can be used to pay for a number of business expenses including working capital needs, such as payroll, accounts payable, and fixed-payment debts. Significantly, the term of the loan could potentially be as long as 30 years. The terms of any loan are determined on a case-by-case basis and are dependent upon each borrower’s ability to repay. The interest rate is 3.75% for small businesses and 2.75% for non-profits.
Eligibility for an SBA Disaster Loan
Small business owners in all U.S. states and territories are currently eligible to apply for an EIDL due to Coronavirus (COVID-19). Small businesses and small agricultural cooperatives that meet the Small Business Act’s definition of “small business” and private nonprofit organizations are eligible for an EIDL.
In the past, the SBA has required that any state or territory impacted by disaster provide documentation certifying that at least five small businesses have suffered substantial economic injury as a result of a disaster, with at least one business located in each declared county/parish.
The recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act expanded eligibility to include businesses with not more than 500 employees, sole proprietorships, independent contractors, cooperatives with not more than 500 employees, Employee Stock Ownership Plans with not more than 500 employees and tribal small business concerns with not more than 500 employees.
The CARES Act also relaxed the eligibility requirements for SBA disaster loans. Small businesses no longer have to certify that they are unable to obtain credit elsewhere. Additionally, so long as the business was operating as of January 31, 2020, the prior requirement that an applicant be in business for one year prior to the date it applies for an SBA loan is also waived. Significantly, the SBA is not requiring personal guarantees for loans of less than $200,000.
Applying for an SBA Disaster Loan
The SBA is waiving several application requirements in an effort to process applications more quickly. The SBA is relying on businesses to self-certify eligibility. In addition, businesses are no longer required to provide tax returns; instead, the application may be approved based solely on the applicant’s credit score or other “appropriate” methods.
For businesses that are already suffering, time is of the essence. You can apply for a loan via the SBA’s secure website. To help speed up the loan process, you can start gathering the information that you will need to proceed with the application:
Legal and trade names of the business
Federal EIN number or Social Security number
Gross revenue and cost of goods sold for the 12 months leading up to January 31, 2020
Any lost rents due to the disaster
Date the business was founded
Number of employees
Ownership information, including percentage of business ownership; home address; phone number; social security number; date and place of birth; and citizenship status.
Once a business submits an application, the typical timeline for approval is two to three weeks, and disbursement can take up to five days. However, approval timelines will depend of the volume of applications received, which is expected to be significant.
Emergency Economic Injury Grant
Under the CARES Act, small businesses impacted by COVID-19 can apply for an Emergency Economic Injury Grant (EEIG) of up to a $10,000 advance on an Economic Injury Disaster Loan for emergency capital. To access the advance, you first need to apply for a disaster loan. During the application process, you will be able to request the advance. This loan advance will not have to be repaid.
Paycheck Protection Program
For small businesses, disaster loans are just one form of financial assistance available. Businesses that receive an EIDL between January 31 and June 30, 2020, for COVID-19-related losses may apply for a Paycheck Protection Program loan. Alternatively, businesses may refinance their existing EIDL into a Paycheck Protection Program loan. However, businesses can’t receive a Paycheck Protection Program and an EIDL for the same purposes. In addition, funds from an EEIG must be subtracted from the loan amount forgiven under the Paycheck Protection Program.
If you have questions, please contact us
If you have any questions or if you would like to discuss the matter further, please contact the Scarinci Hollenbeck attorney with whom you work, at 201-896-4100.
New Jersey Legislature Passes “Power NJ Act” Clearing Path for Advanced Nuclear Energy Development
On June 30, 2026, the New Jersey Assembly and Senate both approved the “Power NJ Act” (A4881), sending the legislation to Governor Sherrill for signature after unanimous, bipartisan approval. The Power NJ Act would direct the New Jersey Board of Public Utilities, in partnership with the New Jersey Economic Development Authority, to establish a program […]
NJ Supreme Court Confirms Personal Email Is Within OPRA's Reach: What Boards, Municipalities, Public Officials and Public Entities Must Do Now
If Your Public Officials Conduct Public Business on Personal Accounts, Those Communications May Be Subject to Disclosure under the New Jersey Open Public Records Act (N.J.S.A. 47:1A-1 et seq.). A recent New Jersey Supreme Court decision has direct consequences for every board of education, municipality, and public agency in the state. In Rosetti v. Ramapo-Indian […]
On June 15, 2026, NJDEP adopted final PFAS remediation standards for PFNA, PFOA, PFOS, and GenX, converting interim criteria into enforceable requirements. NJDEP has adopted final remediation standards for PFNA, PFOA, PFOS, and GenX, converting interim criteria into enforceable requirements under N.J.A.C. 7:9C, 7:26D, and 7:26E. The rule establishes a groundwater standard for GenX, incorporates […]
IRS Refund Deadline Approaches: Taxpayers Should Consider Filing Protective Claims Before July 10, 2026
A recent Court of Federal Claims decision may entitle taxpayers to refunds of interest and penalties paid on federal tax obligations that came due during the COVID-19 disaster period. The IRS refund deadline tied to that ruling is July 10, 2026, and eligible taxpayers should consider filing a protective claim before it expires. On March […]
NJ Family Leave Act 2026 Amendments: What Small Businesses Must Do Before July 17
Small Business, Big Leave: New Coverage Rules, Lower Eligibility Thresholds, and Expanded Reinstatement Rights If your New Jersey business has 15 or more employees, you will soon be required to provide job-protected family leave under state law. Effective July 17, 2026, the NJ Family Leave Act amendments lower the coverage threshold from 30 employees to […]
DOJ and DEA Order Immediately Reschedules FDA-Approved and State-Licensed Medical Cannabis to Schedule III: What Operators Need to Know
On April 23, 2026, the United States Department of Justice and the Drug Enforcement Administration announced an order that marks the most consequential shift in federal cannabis policy in more than five decades. Acting Attorney General Todd Blanche signed an order that immediately places both FDA-approved cannabis products and state-regulated medical cannabis products into Schedule […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
