How to apply for Economic Injury Disaster Loan in the Covid-19 pandemic?
Covid-19 has shaken the very core of our economic foundation. The loss to the US economy runs in trillions of dollars. To help businesses, especially small businesses loans from the government initiated a cash assistance program called an economic injury disaster loan (EIDL). It is meant to provide business funding to help them get over their financial woes.
The backdrop of EIDL:
In the wake of Covid-19, the accompanying lockdowns, and halt in the economic activities, the US government passed a CARES act. It envisaged providing loan assistance to businesses under the following two programs;
Paycheck protection program (PPP)
Economic injury disaster loan (EIDL)
Here we will talk about EIDL only.
The loans under EIDL were to be handed out to the deserving businesses through the Small Business Administration (SBA). This program was launched in March 2020, and it was supposed to last till December 2020. But seeing the gravity of the pandemic, the program has been extended till December 2021. We are effectively under the second phase of the EIDL under the aegis of the Consolidated Appropriations Act (CAA 2021)
Critical components of EIDL:
The all-out loan that you can get under EIDL is US$2 million.
It carries a marginal interest rate of 3.75% for small businesses and 2.75% for non-profit organizations.
The loan can be paid back in 30 years, depending on the financial condition of the borrower.
The loan payment starts one year after acquiring the loan. But if the borrower desires, he can start paying back the loan from the first year. Either way, the interest accrues.
You can set up online payment methods for paying back the loan too.
Earlier, the borrower was eligible for an EIDL advance of US$10,000 within days after the successful submission of its loan application. This advance was non-refundable and deducted from the total loan eligibility. This facility has been withdrawn now in the second phase of the EIDL program.
For loan amounts fewer than or equal to US$25,000, no collateral is need. If more than US$25,000 is require, the SBA may use the business’s assets as collateral through the general security interest agreement.
The loan does not carry any pre-payment penalty or fee.
Who can apply for the EIDL?
The eligibility criteria of the EIDL is as follows;
You must be the owner of a small business in the US or US territory.
A small business is defined as a business with 500 or less than 500 employees. If, however, you are very adversely affected by the pandemic but have more than 500 employees, you may apply for it as well.
SBA’s Office of Disaster assistance works with state management divisions to declare certain areas as “eligible areas”. You may visit https://disasterloan.sba.gov/ela/Declarations/Indexor for the current updated list.
How to apply?
The procedure to apply for this loan is simple and straightforward. As we indicate earlier, these loans were doled out through the Small Business Administration (SBA). You must go to their website, check your eligibility, and then fill the online form to apply for the loan. Approval of the loan application usually takes 2-3 weeks. And after approval, the disbursement of the loan takes 4-5 business days.
SBA will typically ask for the following list of documents from you;
Standard information regarding your business’s identity
Details of the business ownership
A 12-month detail of the gross revenue before the pandemic.
A 12-month of the cost of goods sold before the pandemic
Cost of lost rent due to the pandemic
Details of any monetary assistance that you might have received due to the pandemic.
It is not a final list. SBA may ask for any other document that it deems necessary to support your loan application.
You will also have to declare yourself as a small business in need of cash assistance. You can take professional help if you think you are unable to fill the application form.
Use of the EIDL program:
You can use your small business loan in the shape of EIDL for payroll support, rent, mortgage, account payable, interest payments, working capital support, and other such operational and running costs. It is also use to buy material, inventories, etc., for keeping your business in a running position.
You cannot use this money to pay dividends or refinance an existing loan, purchase or repair fixed assets, owner disbursements, and deliver fixed debts.
VIP Capital Funding for your business financing needs:
VIP Capital Funding is an organization that specializes in small business funding. It has been giving small business loans to thousands of businesses across the country. It is fully aware of the cash crunch small companies are facing due to the pandemic. Its owner and executive manager partner, Mr. Joshua Triplett, became the mouthpiece of small businesses and campaigned for the small businesses in getting some cash relief from the government. It finally led to the passage of the CARES act.
How to get a business loan from VIP Capital Funding?
Getting a business loan from VIP Capital Funding is a cakewalk. The company has a straightforward loan application procedure. You will not be burdened with cumbersome documentation and demand for heavy collaterals. It is a significant concern for small business financing. They must go through many scrutinizes and face harsh conditions like merchant cash assistance to get business funding. But with VIP Capital Funding, you can forget about needs like investor funding, MCA, high-interest rates, hidden charges, etc. You won’t be bound regarding the spending of the loan. It is use in any way you like. The application is processes at fast-track speed, and you can expect the loan amount in your account in 3-4 business days. The organization enjoys the trust and support of its clients as well as industry rating and monitoring agencies. You cannot afford to lose this opportunity for your small business funding.
Contact VIP Capital Funding
You can reach VIP Capita Funding by logging on to their website at www.vipcapitalfunding.com You can also call them at 800-735-7754 or email them at email@example.com.
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