1 1 (March 6, 2020)

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               Researh Sevice

SBA Economic Injury Disaster Loans for


March 6, 2020
The current coronavirus disease (COVID-1 9) outbreak may have significant economic implications for
businesses and nonprofit organizations including negative impacts on imports, global supply chains, and
tourism. Furthermore, if COVID-I 9 becomes widespread or prolonged it may slow global growth, and
some businesses may be forced to furlough or lay off workers. This Insight considers whether the Small
Business Administration (SBA) could provide economic injury disaster loans (EIDLs) to eligible
businesses and organizations that have suffered substantial loss as a result of COVID-19.

EIDL Overview

EIDLs provide eligible small businesses and nonprofit organizations up to $2 million to help meet
financial obligations and operating expenses that could have been met had the disaster not occurred. Loan
proceeds can only be used for working capital necessary to enable the business or organization to alleviate
the specific economic injury and to resume normal operations. Interest rates for EIDLs are statutorily set
at 4% per annum or less and can have maturities up to 30 years.
EIDLs are available only to businesses and private and nonprofit organizations that are located in a
declared disaster area, have suffered substantial economic injury, are unable to obtain credit elsewhere,
and are defined as small by SBA size regulations.

Potential Triggers

There are three disaster declarations that could make EIDL available:
    1. the SBA Administrator issues an EIDL declaration under the Small Business Act upon
       certification from a state governor that at least five small businesses have suffered
       substantial economic injury as a result of a disaster;
    2. a physical disaster declaration is issued by the SBA Administrator under the Small
       Business Act in response to a gubernatorial request for assistance; or

                                                                Congressional Research Service

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