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Emergency Economic Injury and Disaster Loan Grants

Congress recently approved changes to the Emergency Economic Injury and Disaster Loan and Grant program allowing some agricultural enterprises to apply to receive grants and low interest loans.

To qualify for either the loan or grant an agricultural enterprise must meet the following criteria:

  • Agricultural business must have 500 or fewer employees
  • Agricultural business must be engaged in the production of food and fiber, ranching, and raising of livestock, aquaculture, and all other farming and agricultural related industries (as defined by section 18(b) of the Small Business Act (15 U.S.C. 647(b)).

Please note, applications for both the Economic Injury Disaster Loan and the Economic Disaster Grant must be made directly through the Small Business Administration (SBA) website. Below is an overview of each program, however you can find complete details on the SBA website here and if you wish to apply, the application can be found here.

Economic Injury Disaster Loan (EIDL) Overview

EIDLs provide eligible small businesses and nonprofit organizations up to $2 million to help meet financial obligations and operating expenses that could have been met had the disaster not occurred. Loan proceeds can only be used for working capital necessary to enable the business or organization to alleviate the specific economic injury and resume normal operations.

  • EIDL funds are intended to cover payroll and other operating expenses that the business could have otherwise met in a non-disaster economy.
  • Funds cannot be used for refinancing, making loan payments on other federal debts, to repair physical damages, to pay IRS tax penalties or to pay out dividends.
  • Interest rates for EIDLs are statutorily set at 4% per annum, but COVID-relate EIDL rates have typically been around 3.75% for companies and 2.75% for nonprofits, and can have maturities up to 30 years.
  • Principal and interest payments of EIDLs can be deferred for up to one year.
  • Collateral is generally required for loans over $25,000 if it is available, though SBA will not decline loans for a lack of collateral.
  • While loan amounts may range up to $2 million, specific loans depend upon the amount of economic injury that a business has suffered. This amount is determined by the SBA on a case-by-case basis after businesses apply.

EIDL Grants & Advances

As authorized by the CARES Act, emergency EIDL grants are available within three days of submitting an EIDL application to the SBA. Grants can be used by small businesses for a number of purposes, including providing paid sick leave, payroll, meeting production costs, paying rent or mortgages on business spaces and anything else to help with the continuity of the business. Businesses that use these funds for permissible COVID-19 related costs will see the advance become a grant. Once this happens, the business will no longer need to pay back the advance they received. While total grant/advances are capped at $10,000, SBA has further restricted grants/advances to a limit of $1,000 per employee.

How to Apply

Applications for EIDL must be submitted directly through the SBA website.

Please note, each eligible applicant will be expected to compile and enter basic information about their business, such as operating expenses, revenue, business names, contact information and employee information. SBA is relying upon a self-certification process contained within the application, which typically takes around two hours to complete. During this process, applicants will also need to note whether or not they’d like to receive the EIDL grant/advance. The SBA typically takes 18 to 21 days to process the loan and then two to five days to disburse the funds.

We Are Here to Help

Farm Credit of Florida is committed to helping our members through this difficult time. We have a number of options for making payment adjustments and are ready to help you with a plan for success. Please contact your Farm Credit of Florida loan officer with any questions so that we can work together with you.