When disaster strikes businesses suffer great losses. The National Climatic Data Center (NCDC) rates Hurricane Katrina’s damage at $133.8 billion 2007 dollars. The Economic Injury Disaster Loan Program (EIDL) provides up to $2 million of financial assistance to small businesses or private, non-profit organizations that suffer substantial economic injury. The loan program is the only Small Business Administration lending program that is not restricted to small businesses. The actual loan amount is decided based on the amount of the disaster losses. It is important to note that the loans are offered regardless of whether the applicant suffered physical damage.
You can apply for an Economic Injury Disaster Loan Program online through the SBA’s secure website. The loan application and loan review process does take a long time, business cash advance lenders can offer immediate financing and working capital solutions to businesses of all sizes.
When disaster strikes your small business or nonprofit organization, as a business owner you may not be in a position to meet your immediate financial obligations. An Economic Injury Disaster Loan comes in handy in enabling you to continue operating as if had the disaster not happened. It allows a business to maintain critical working capital position during the period immediately following an unexpected disaster. However, Economic Injury Disaster Loan Program s do not replace lost sales or revenue.
If you are thinking of applying for an Economic Injury Disaster Loan Program, one of the conditions that you must meet is that your business or nonprofit organization must be located in a county that has been officially declared a disaster area. Your business or organization must also have sustained economic harm as a result of the disaster.
The SBA will provide up to $2 million in disaster assistance to a business or nonprofit organization. This loan cap includes both physical disaster loans and Economic Injury Disaster Loan Program funds. You will not be required to pay any upfront fees or early payment penalties, and the repayment period is determined by your ability to repay the loan.
According Federal Emergency Management Agency, many businesses find it hard to recover after disaster strikes. Almost 40 percent of small businesses never reopen their doors following a disaster because just a few inches of water can cause tens of thousands of dollars in damage. Over the past 5 years (2006-2010), the average commercial flood claim has amounted to just over $85,000.