Economic Injury Disaster Loan (EIDL)

An EIDL, or an Economic Injury Disaster Loan, is a loan from the United States government that is available to businesses and individuals who have suffered economic injuries as a result of a natural disaster.  The loan can be used to cover any costs that have arisen as a result of the disaster, such as property damage, loss of income, or increased expenses. Due to the Coronavirus Pandemic, eligibility for EIDL Grants has been expanded to include businesses and individuals who have suffered economic injuries as a result of the pandemic.

Difference Between EIDL Grant and an EIDL Loan?

While EIDL Loans and EIDL Grants may seem like the same thing, there are a few key differences between them. 

Payment

The first is that EIDL loans must be repaid and EIDL grants do not. 

Purpose

EIDL loans can be used for any purpose, while EIDL grants can only be used to cover costs that have arisen as a result of the disaster. 

Application

EIDL loans require an application process, while EIDL grants are automatically available to certain individuals and businesses following a natural disaster. EIDL grants do not require an application process and EIDL Grants are automatically available to business owners, farmers, and private individuals whose properties have been affected by a natural disaster. 

EIDL Grant Coverage

EIDL grants are automatically available to certain individuals and businesses following a natural disaster. EIDL Grants can only be used to cover costs that have arisen as a result of the disaster.  Examples of EIDL grant uses include, but are not limited to: 

  • Temporary Housing
  • Repairs to Primary Residence
  • Disaster-Related Medical Expenses
  • Lost Wages
  • Child Care Expenses

Benefits of Applying for EIDL Grants?

There are several benefits to applying for EIDL Grants, including:

  • No repayment is required
  • Can be used for any disaster-related costs
  • Available to businesses and individuals
  • Easier than EIDL Loans in terms of processing

Two Types of EIDL Grants

EIDL Grants come in two types: Targeted EIDL Advance and Supplemental Targeted Advance.

Targeted EIDL Advance

Targeted EIDL Grants are available to business owners, farmers, and private individuals whose properties have been affected by a natural disaster. EIDL Grants can only be used to cover costs that have arisen as a result of the disaster. The Targeted EIDL Advance provides funds of up to $10,000 to applicants who:

  • Are in a low-income community.
  • Can demonstrate more than 30% reduction in revenue during an eight-week period beginning on March 2, 2020, or later. 
  • Have 300 or fewer employees.

Supplemental Targeted Advance

The Supplemental Targeted Advance provides a supplemental payment of $5,000 that does not have to be repaid.  You may still be eligible for the Supplemental Targeted Advance if you meet eligibility criteria even if you have previously received the original EIDL Advance in the full amount of $10,000.

  • Is located in a low-income community.
  • Can prove more than a 50% economic loss during an eight-week period beginning on March 2, 2020, or later, compared to the same period of the previous year. 
  • Has 10 or fewer employees.

How to Apply for an EIDL Grant?

The first step in applying for an EIDL grant is to determine if you meet the eligibility criteria.  If you do, you can apply for an EIDL grant online. To apply online, visit https://covid19relief.sba.gov/#/.  The following documents are required to complete the EIDL application process: 

  • Most recent business federal income tax return
  • Most recent personal federal income tax return, if self-employed
  • Most recent statement of operations, if you are a farmer
  • EIDL application form
  • Supporting documentation for losses suffered as a result of the disaster, including receipts and invoices

The Bottom Line

Accessing EIDL Grants is a great way to help pay for disaster-related costs without having to repay EIDL funds. EIDL Grants are available to business owners, farmers, and private individuals whose properties have been affected by a natural disaster.  This grant program is one of the provisions in the CARES Act, which provides EIDL Grants to low-income individuals and families living or owning businesses in disaster-affected areas.  EIDL Grants may be used for temporary housing, repairs to a primary residence, disaster-related medical expenses, lost wages, child care expenses, and more.

An EIDL grant is an economic injury disaster loan that can be used to cover costs that have arisen as a result of a natural disaster.
EIDL grants are available to business owners, farmers, and private individuals whose properties have been affected by a natural disaster.
Eligible applicants must be located in a low-income community, can demonstrate more than 30% reduction in revenue during an eight-week period beginning on March 2, 2020, or later, and have 300 or fewer employees.
To be eligible for EIDL grants, business owners, farmers, and private individuals must have their properties affected by a natural disaster.
The EIDL grant program provides funding to help pay for disaster-related costs. These funds do not need to be repaid.

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.