COVID 19 and Economic Injury Disaster Loans Declaration by U. S. Government

The United States is small. Business administration is offering appointed states and some territories low-interest rates loans to invest in their business for the loss due to the coronavirus, i.e. (COVID 19). They started a program by the name of Economic injury Disaster loan declarationTo some territories, these loans will be issued under the authority of their governor. Any such economic declaration of loans will help the businesses which faced so much loss due to coronavirus.

Whitmer’s request :

Governor Gretchen Whitmer has announced that the United States Small business administration has approved her request for the Economic Injury Disaster loans Declaration. This has opened opportunities for small businesses to obtain low-interest loans from the SBA.

This decision will open the critical financial resources for small businesses. While accessing these loans, people are looking forward to taking advantage of this scheme.

The EIDL designations show that the small business of the Michigan state, agricultural cooperatives that have suffered many economic losses due to the Covid 19 outbreak can now apply for this loan to use the resources for their business.

These SBA loans will provide a decent amount of capital for the businesses facing temporary losses due to the coronavirus.

Making Economic Injury Disaster Loans are available in the U.S. It is the first step to give some support to the suffering businesses.

EIDL Declaration: 

Today’s EIDL declaration by the SBA is also adding to the growing number of resources available to the small businesses in the United States, which are negatively affected by the coronavirus. This includes Michigan’s small business relief program authorized by the Michigan strategic funds. More than $20 million is granted in loans to carry on the flow of cash, and their businesses should keep working. The Michigan Economic Development Co corporation’s

MEDC, the call centers are ready to assist all the time so that anyone who needs assistance can contact them quickly.

What is EIDL : 

The EIDL is a low interest fixed loan up to $2 million In assistance to those who suffered losses in their businesses due to the coronavirus outbreak, the funds for these loans come directly from the U.S. treasury. The loan amounts are dependent on the actual loss. These loans provide vital support for a business that has faced many casualties due to the Virus or any other disaster. These loans can provide significant support in the re-establishment of the company. But one should keep in mind that EIDL does not replace the lost revenues or the lost sale.

Recent updates in EIDL programs :

When the EIDL was first passed by congress, it was a grant of $10000. But the Trump changed it to the grant of $1000 per employee. Countering congressional intent. This addresses some issues :

  • Businesses which have much  low income which received the loan can also get $ 10000 as a gift.
  • Business who qualify for the program  and which have  low income  they didn’t got the loan or any type of gift just because of that the government  was out of budget can also get some extra gifts $ 1000.
  • Before, if you have received both the EIDL loans and the assistance, you had to deduct the  forgiveness amount, but now you don’t have to remove any amount from forgiveness in 2021.

Extender Provisions :

Many of the extender provisions was set to be expired with the end of the year 2020, but the new acts extended them till 2025. They are not limited to the :

  1. The newly established markets tax credits.
  2. The excluded from the overall income of the business .
  3. The Employers credit was paid for the family and medical leave.

Some provisions were made permanent by the act :

  • The buildings which are not consuming as much of electricity were free to use the scheme.
  • Gross income was adjusted as 7.6 % after deducting the medical bills and other expenses.

Other tax provisions:

  • The taxpayers have this facility to spend their income from the past year to analyze their earned income tax credit and the refundable portion of the child tax credit.
  • For the employees that participated in the tax holiday, there was a relaxation for them for their payrolls and the other taxes.
  • Individuals that didn’t itemize their deductions can now also deduct $300 in the charitable trusts.
  • The payroll tax credits are paid for sick, and the family leaves are provided by the government as a response to the first wave of the coronavirus, i.e., COVID 19.

Corona Virus :

Patients with the confirmed infection have reported mild symptoms i.e.

  • Cough.
  • Fever.
  • Shortness of breath.

Some precautionary measurements :

  • If someone thinks that he is exposed to the Virus, they should call their health care provider.
  • Everyone should wash their hands with soap or use sanitizers.
  • Avoiding the eye and nose touches.
  • Always wear a face mask that will protect you from getting infected.
  • Avoid gatherings and always obey the social distancing rule.


Eligible business to apply :

SBA’s  Economic Injury Disaster Loans are available to different sort of companies, e.g., small agricultural and most of the nonprofit organizations like

  • Business directly affected by the disasters
  • Business offering services to business declarations.
  • Other business which is indirectly related to the industry harmed by the disaster

Loan basics:

  1. The applicant’s credit score must be up to the mark to be acceptable to the SBA.
  2. The applicant must show the SBA that the loan can be repaid within the given time.

The applicant must prove that the business be physically located in the declared country and was damaged by the disaster

  1. directly.

SBA’s Economic Injury Disaster loan terms :

How much can one borrow?

The business eligible for the loan can be provided with $2million. With an interest rate of 3.75 % for small companies while 2.8 % for nonprofit businesses with terms up to 30 years.

The eligibility for these working capital loans depends upon the fact that the business is small and what type of business it is, and the financial resources.

How the funds can be utilized:

These working capital funds can be utilized for the payments or unpaid bills that could not be paid by the disaster’s time was not held. One can also deliver the fixed debts with the allocation of the funds by SBA.

Collateral Requirements:

  • Economic injury Disaster provides loans while demanding the guarantee over 25000$.
  • SBA takes real estate as guarantee but only if  it’s available.
  • SBA is not obliged to  decline the loan due to the lack of guarantee but takes the borrowers’ pledge or  what ever valuable thing is available  with them.

 What kind of business can apply?

Most of the businesses are eligible for the SBA’s loans. Some of them include hotels, charter boats, sports vendors, property dealers, restaurants, retailers, travel agencies, and wholesalers.

The applicant

business must have documentation showing that the company was physically present in the state when the disaster occurred. The physical presence should be in a legal form showing enough proof for the SBA’s loan scheme.

SBA working capital loans are different from the other SBA loans :

  • The funds of SBA economy injury Disaster come directly from the United States Treasury.
  • Applicants do not go to the banks for a loan. Instead, they can apply directly at the official website, i.e.,
  • There is no fee to apply for the loan.
  • There will be no obligation to take the loan if they offer you.
  • The maximum amount of the loan is $25000.
  • The applicants applying for loans can also apply for another one even if they have any previous SBA loans or any other outstanding loans.

Some of the basic form-filling requirements:

  1. The complete Small Business loan application form is also known as form 5.
  2. The information for the taxation of the person who is applying for the loan and the principals and the affiliated ones.
  3. The complete copies of the federal income tax return document.
  4. The schedule of liabilities that a person is holding.
  5. Personal financial statement of the applicant.

Other additional information can also be demanded that depends upon the authorities, which includes :

  1. A complete copy of the schedule of the most recent federal income tax return for principals, managing members of the general partners, and affiliated persons.

A year-end

  1. profit and loss statement can be utilized against the most recent federal income tax return statement if it not available due to some reasons.
  2. The current year and up to the applying date profit and loss statement can be demanded.
  3. Monthly sales figures will also be required as the additional filing requirements.

Ineligible Businesses:

Some of the businesses are not eligible for this program, including some agricultural enterprises; the religious organizations that work for the betterment of the society and call the people towards the religion are also out of this circle, which can benefit this loan program. Charitable organizations and some NGOs are also not eligible for this program. Race tracks, casinos, pubs, as well as poker parlors, are also not suitable.

Applying process: 

  • The interested persons can directly  apply online while using the Electronic Loan Application on SBA’s secure website:
  • Hard copies of the loan application can be downloaded directly from the website, mailed to the U.S. small business administration, processing, and disbursement center.
  • Interested applicants can acquire the application form by calling the SBA’s helpline.

One can apply online by visiting the website and downloading the app from a trusted source.

After downloading the app, you will have to follow some steps accordingly :

  1. You have to register by providing all the necessary information that they will ask from you.

The information:

  1. Must be correct and up to date; otherwise, they have the right to cancel your application at any time without letting you know.
  2. After registering your account, open the tab where it says apply now. Open the form now, fill up all the details accordingly make sure that all of the information.
  3. There will be a * sign before the box, which implies that the field is mandatory to fill. You will not be able to fill up the next page until you fill-up the fields having * sign on them.
  4. The next page will allow you to fill up your business details, and if you have partners in your business, then the details of your partners will also be required.
  5. Now the application is complete, the filling requirements on the page must be submitted to complete the process.
  6. Now scan all your documents as it is a convenient way to complete the whole process.


Some persons can help you prepare the required documents. These are free to call also there is no fee. The partner can be obtained by heading towards any of these offices :

  • Small business Development Centers SBDCs
  • Women’s business centers WBCs
  • The local chamber of commerce.

Just go through all the documents needed, fill them carefully also recheck to ensure the provided information. Sometimes, if any information is missing, it can cause a delay the grant of permission for a loan. If more funds are needed, then the applicant can claim for the increase of the loan amount, but if the applicant wants to decrease the amount, it can be done respectively at the request of the applicant.


There are some basic things to remember to be safe from any mental disturbance.

  • If your loan is accepted, then you are not obliged to accept the funds. This is the case where you should seek some assistance from the helpline of the website of SBA.
  • The EIDL is not the only option one can have, but the SBDC can also assist you while guiding you to determine the best course of action with your loan funds that how you can invest the funds for the sake of the betterment of your business.


Most of the individuals are now preparing for the submission of application for the grant of the loan but the government will pass the loans according to the needs of the people as well as their business. There is a lot of load on the people working physically in the offices of SBA try to avoid the gatherings to avoid the Dangers of contaminating others as well as yourself instead submit your application Via the SBA app or the Official website.

Interesting Related Article: “5 Things You Need To Know About Small Business Loans During The Pandemic