Frequently Asked Questions about the SBA Economic Injury Disaster Loan Program


How are the new disaster relief funds different from standard SBA loans?

The SBA offers financing under its 7(a) loan program. There are several different programs under the 7(a) loan program.

The standard 7(a) program (CARES ACT)

  • Maximum loan amount of $5million. (up to $10,000,000)
  • Interest rates are negotiated between the borrower and lender but may not exceed the SBA maximum rate.
    • Currently the maximum rate for a loan over $50,000 with a term more than 7 years is prime rate +2.75% or about 6.00%. (3.75% for businesses and 2.75% for nonprofit entities)
  • Fees 1-2% of borrowed funds (waived)

Express loan program

  • Provides loans up to $350,000 ($1,000,0000) for no more than 7 years with an option to revolve. There is a turnaround time of 36 hours for approval or denial of a completed application. The uses of proceeds are the same as the standard 7(a) loan.

Community Advantage loan pilot program

  • Allows mission-based lenders to assist small businesses in underserved markets with a maximum loan size of $250,000. The uses of proceeds are the same as the standard 7(a) loan.

504 Loan Program

  • Designed to foster economic development and job creation and/or retention. The eligible use of proceeds is limited to the acquisition or eligible refinance of fixed assets.

MicroLoan Program

  • Making loans through nonprofit lending organizations to underserved markets. Authorized use of loan proceeds includes working capital, supplies, machinery & equipment, and fixtures (does not include real estate). The maximum loan amount is $50,000 with the average loan size of $14,000.

Under the SBA Economic Injust Disaster Loan Relief Program

  • This assistance is only available when the SBA determines a business cannot obtain credit elsewhere
  • Maximum loan amount $2million. (If the business is a major source of employment, the SBA has authority to waive the $2M cap)
  • Interest rates up to 4%, but provided they cannot obtain credit elsewhere, interest rates for businesses and small agriculture cooperatives is 3.75% and not-for-profit entities is 2.75%

What information is needed to complete the application?

Business Loan Application (SBA Form 5) completed and signed by a business applicant.

IRS Form 4506-T completed and signed by Applicant business, each principal owning 20% or more of the applicant business, each general partner or managing member and, for any owner who has more than a 50% ownership in an affiliate business.

(Affiliates include business parent subsidiaries, and/or businesses with common ownership or management).

Complete copies, including all schedules, of the most recent Federal income tax returns for the applicant business; an explanation if not available.

Personal Financial Statement (SBA Form 413) completed, signed and dated by the applicant (if a sole proprietorship), each principal owning 20% or more of the applicant business, each general partner or managing member.

Schedule of Liabilities listing all fixed debts (SBA Form 2202 may be used).

Additional Information that may be Necessary to Process your Application:

Complete copies, including all schedules, of the most recent Federal income tax returns for each principal owning 20% or more of the applicant business, each general partner or managing member, and each affiliate when any owner has more than a 50% ownership in the affiliate business.

Affiliates include, but are not limited to, business parents, subsidiaries, and/or other businesses with common ownership or management.

If the most recent Federal income tax return has not been filed, a year-end profit and loss statement and balance sheet for that tax year is acceptable.

A current year-to-date profit and loss statement.
Additional Filing Requirements (SBA Form 1368) providing monthly sales figures.

How long would it take to get a loan?

Application process takes about 2 to 3 weeks. Within 5 days of signing the Loan Closing Documents, the business will get an initial disbursement of $25,000 for Economic Injury (working capital) and in addition could receive $25,000 for Physical Damage.
A case work assigned to the Company will work with company to meet all loan conditions and schedule out subsequent disbursements.

Are there specific types of companies/industries that this is geared to?

A small business is defined based on the industry, criteria used is revenue and/or number of employees. Typically businesses with 250 – 1,500 employees qualify.

What are the general terms and are there personal guarantees?

The business will have to be able to prove it cannot obtain financing elsewhere
The term is determined by the ability to repay the loan but cannot exceed 30 years
A loan will not be declined for lack of collateral, but SBA will require the borrower to pledge collateral that is available.
Regarding PERSONAL GUARANTEES – we are still looking into this detail. More to come.

Who would I call at the SBA if I have questions?

You can call the SBA at 1-800-659-2955 (TTY: 1-800-877-8339)

If I already have a bank loan, does that inhibit me from getting SBA support?

No, provided the business can prove it cannot get credit elsewhere, the SBA will consider the applicant

Where do I go to fill out the loan application?

Applications are available online at https://disasterloan.sba.gov/ela.

What states have enacted the disaster relief provisions?

Just about every state has enacted disaster relief provisions. You can check with your state website for details. Here are two examples:
New Jersey
New York

What is the probability of actually getting funds?

Applicant must show the ability to repay the loan, and cannot obtain funds elsewhere

How much could we qualify to get? What is it based on?

The SBA loan officer will work with the Company to determine how much the Company would qualify for. It is based on the ability to meet current business obligations.

For additional FAQs, please refer to this SBA Disaster Loan Program Frequently Asked Questions document.


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