How to Get an Economic Injury Disaster Loan
What it is
| At a Glance | |
|---|---|
| Loan Type: | Disaster |
| Lender: | Government |
| Secured: | No |
An economic injury disaster loan is a loan obtained through the United States Small Business Administration for small businesses and small agricultural cooperatives that have suffered substantial economic injury resulting from a physical disaster or agricultural production disaster as designated by the Secretary of Agriculture. This economic injury disaster loan can help businesses or cooperatives to meet necessary financial obligations that would have been met had disaster not occurred. It provides relief for damages that are a direct result of a specific disaster and permits businesses to maintain reasonable working capital during the period affected by the disaster.
Only businesses that are unable to obtain credit elsewhere are eligible for the SBA economic injury disaster loan. Businesses that are eligible can receive up to $1.5 million in disaster assistance for both economic injury and physical damage. The loan amount will be based upon actual financial need. The interest rate for this type of loan cannot exceed four percent per year, and the term of the loan cannot exceed 30 years. Term for each loan will be determined based upon a business's ability to repay the borrowed amount.
Who it's for
Many small businesses find themselves in need of a business loan at one time or another for a variety of reasons. When an agricultural disaster strikes, circumstances can become even more desperate. If your small business has suffered substantial economic injury, regardless of physical damage, and is located in a declared disaster area, you may be eligible for financial assistance from the SBA.
What you need to do to apply
In order to be approved for an SBA economic injury disaster loan, a small business must demonstrate that substantial economic injury has occurred. This means that the business is unable to meet its obligations as it matures and it cannot pay its ordinary and necessary operating expenses.
Apply for an Economic Injury Disaster Loan
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