While the Payroll Protection Program (PPP) ended on August 8, if your business needs money to survive, you can still obtain a low-interest Emergency Income Disaster Loan (EIDL) of up to $150,000 from the Small Business Administration (SBA). You apply for an EIDL with the SBA, and the loan is funded directly from the U.S. Treasury.


Your business qualifies for an EIDL if your business has fewer than 500 employees and has suffered “substantial economic injury” due to the COVID-19 pandemic. You have suffered economic injury if you’re unable to pay your normal business operating expenses and other bills or to sell or produce your goods or services because of the pandemic. You can obtain an EIDL even if you already received a PPP loan.


The SBA is currently capping EIDLs at $150,000. The amount you receive is intended to cover six months of your business operational expenses. For most small businesses, the loan amount is based on gross revenues minus cost of goods sold during the period from February 1, 2019, through January 31, 2020, divided by two.

Loan Terms

The EIDL is a 30-year loan at a 3.75 percent interest rate. You don’t have to make any payments until one year after you receive the loan (interest continues to accrue during the one-year delay). There is no prepayment penalty.

Collateral or Guarantee?

The SBA does not require a personal guarantee for an EIDL of less than $200,000. Collateral is required only if the loan is over $25,000. For loans over $25,000, the SBA obtains a security interest in all tangible and intangible property your business owns or acquires, including inventory, equipment, and receivables. The SBA files a UCC-1 lien against your business.


Be careful what you spend EIDL money on.  The money is supposed to be used to help you carry on your business until things get back to normal. You can use the money to pay normal operating expenses, such as employee salaries and benefits, rent, utilities, and fixed debt payments. You can continue to take your owner’s draw for work you actually perform for the business.  If you own an S Corp, you cannot take distributions with this money.

As always, if you need help navigating these waters, we’re here to help! Call us at (925) 256-6321 or email me jrunalp@unalpcpa.com.