June 12, 2018
WEV’s Business Recovery Specialist, Nicki Parr, recently had a conversation with the SBA’s Public Information Officer about what small businesses economically impacted by the winter disasters need to know about applying for an Economic Injury Disaster Loan (EIDL) from the SBA.
The EIDL is a working capital loan designed to help small businesses cover “ordinary and necessary financial obligations during a disaster recovery period”.
Here is a list of the most important points regarding the EIDL application:
- Apply now! Although the deadline is not until October 15th, SBA recommends that you apply as soon as possible to begin the process. Loans can always be modified but you will want to have as much time to get your application in, should the SBA need to come back for supplementary information.
- Ideally, you will be able to provide a three-year sales history but if not, a FORECAST of expected sales during the disaster impact period will be acceptable. The key factor is to be able to show it was your intention to be in business during the affected months.
- The EIDL is not meant to replace lost revenue but instead provide the funds to enable you to meet your necessary financial obligations – there is a difference!
- The EIDL is intended for businesses/individuals who do not have access to other credit sources
- The SBA will base their decision on whether or not to offer you a loan based on a number of factors including:
- Credit history
- Up-to-date tax filings
- Monthly personal & business income
If you show late or delinquent payment history, a significant debt load relative to income, or have not filed your 2015 or 2016 taxes, you could be refused the EIDL.
- If in doubt, attach supplementary documentation, e.g. proof of a tax filing extension. Also, if you would like anyone else to be able to discuss your application on your behalf (e.g. WEV), then you can provide written authorization to the SBA to that effect.
- EIDLs are provided directly by the SBA, not banks. They are NOT the same as normal SBA loans.
- If SBA refuses your loan application, or requires further information to make a decision, they will inform you in writing. Read all correspondence carefully and don’t give up on the first attempt if you feel you have a case. You also have six months to appeal.
If you are a small business, in good standing, impacted by the recent disaster, WEV is here to help you be successful in your EIDL application. For more information, call the SBA Disaster Recovery Customer Service Center on 1-800-659-2955, or for local support, call Nicki Parr, WEV Business Recovery Specialist on 805-456-2348. WEV is a non-profit dedicated to the financial empowerment of women and minority small business owners.