Congress has acted in support of small businesses in the wake of the COVID-19 pandemic by low-interest federal disaster loans for working capital. Small businesses must have suffered substantial economic injury as a result of the pandemic.

Economic Injury Disaster Loans supplied by the U.S. Small Business Administration offer up to $2 million to help overcome the temporary loss of revenue.

The Harris Beach CARES Act Task Force has compiled answers to the questions you may have most immediately. We can assist you in completing the application process to ensure you get timely consideration under this program.

How do I know if my business is defined as a small business under the SBA Economic Injury Disaster Loan program?

  1. The SBA qualifies your business as a “small business” eligible to receive SBA Economic Injury Disaster Loans based on the industry of the business, the revenue generated by the business and/or the number of employees working for the business. For guidance on such qualification, please visit–table-size-standards.  In addition, eligibility has been expanded to include:
    1. Businesses with not more than 500 employees;
    2. Tribal businesses;
    3. Cooperatives with not more than 500 employees;
    4. ESOPS with not more than 500 employees;
    5. Any individual operating as a sole proprietor; and
    6. An independent contractor during January 31, 2020 to December 31, 2020.
  2. Also your business must have been directly affected by the disaster, offer services directly related to the business in the disaster declaration or indirectly related to the industry that is likely to be harmed by losses in its community.

Where can applications be submitted online for an SBA EID Loan? 

  1. Although applicants were initially encouraged to apply online and download applications at, with the overwhelming number of entities applying for an SBA EID Loan, the SBA is now encouraging paper filings.
  2. Completed applications should be mailed to: S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX   76155.   If you do not have access to a computer, please call 1‐800‐659‐2955 for assistance.

What is the SBA EID Loan application filing deadline?

  1. The filing deadline is December 31, 2020. However, our advice is to get the application filed as soon as practicable.

Where can I get questions answered about the application process and materials that need to be submitted?  

  1. You can call the national SBA disaster assistance customer service center 1-800-659-2955 or email

How much can my company borrow in an SBA EID Loan?  

  1. The law limits SBA EID Loans to $2 million for alleviating economic injury caused by the disaster. The actual amount of each loan is limited to the economic injury determined by the SBA, less business interruption insurance and other recoveries up to the administrative lending limit.   SBA also considers potential contributions that are available from the business and/or its owner(s) or affiliates.   If a business is a major source of employment, SBA has the authority to waive the $2 million statutory limit.

What do I need to provide to the SBA to prove temporary loss of revenue?

  1. Applicants will most likely be required to provide an internally prepared interim profit-and-loss statement and balance sheet.

What are the credit requirements for SBA EID Loans assistance?

  1. Applicants must have a credit history acceptable to SBA. Our understanding is that a minimum credit score of 650 is what the SBA is looking for but will consider alternative methods for determining the applicant’s ability to repay.
  2. Applicants must show the ability to repay the loan.
  3. Collateral is required for all EID Loans over $25,000. SBA takes real estate as collateral when it is available.   SBA will not decline a loan for lack of collateral, but SBA will require the borrower to pledge collateral that is available.

What can the SBA EID Loan be used to pay for?  

  1. Fixed debts, payroll, paid sick leave, making rent or mortgage payments, meeting increased costs to obtain materials and accounts payable and other bills that that can’t be paid because of the disaster’s impact.  The loans are not intended to replace lost sales or profits or for expansion.

What is the interest rate on an SBA EID Loan?  

  1. The interest rate is determined by formulas set by law and is fixed for the life of the loan. The maximum interest rate is 3.75% per annum for small businesses and 2.75% for non-profits.

What is the term of an SBA EID Loan?  

  1. SBA offers loans with long-term payments up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.

Do I need to provide a personal guarantee for an SBA EID Loan?

  1. The SBA has waived any personal guarantee on advances and loans below $200,000.
  2. For loan amounts over $200,000, the SBA may require personal guarantees.

How long does it take to receive an SBA EID Loan once I submit my application?

  1. At this time, the amount of time it takes to receive an SBA EID Loan after an application is submitted is unclear due to the rapid influx of applications arising from the current health crisis. However, we have been advised paper applications, as opposed to online applications, are more likely to be processed in a timely manner.  We also encourage all applicants to provide all information required by the application because incomplete applications can cause significant delays in processing.

While I wait for approval for an SBA EID Loan, will the SBA provide any emergency funding?

  1. Yes, a borrower applying for an SBA EID Loan, can request an Emergency EIDL Grant.   This Grant is an advance on the SBA EID Loan and must be distributed by the SBA within 3 days of the request.   You will not have to pay back the Emergency SBA EIDL Grant even if you are subsequently denied an SBA EID Loan.

For further resources and developments, visit our firm’s COVID-19 response page.

This alert does not purport to be a substitute for advice of counsel on specific matters.

Harris Beach has offices throughout New York state, including Albany, Buffalo, Ithaca, Long Island, New York City, Rochester, Saratoga Springs, Syracuse and White Plains, as well as New Haven, Connecticut and Newark, New Jersey.