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What is the Difference Between an EIDL loan versus a EIDL grant?

The Economic Injury Disaster Loan (EIDL) program is a loan and grant program offered by the U.S. Small Business Administration (SBA) to help small businesses and non-profit organizations recover from economic injury caused by a declared disaster. The EIDL program provides two types of financial assistance: EIDL loans and EIDL grants.

  1. EIDL Loan: The EIDL loan is a long-term, low-interest loan designed to help small businesses and non-profit organizations recover from economic injury caused by a declared disaster. The loan amount is based on the economic injury suffered, and can be up to $2 million. The loan must be repaid, with interest and fees, over a maximum of 30 years.
  2. EIDL Grant: The EIDL grant is a grant that does not have to be repaid, and is designed to provide immediate relief to small businesses and non-profit organizations suffering economic injury from a declared disaster. The grant amount is up to $10,000 and is meant to help cover basic needs such as rent, mortgage, and utilities, while the business is waiting for the loan application to be processed.

The EIDL loan and grant are separate programs, and businesses can apply for both. However, the EIDL grant cannot be used to pay back the EIDL loan.

What is the average interest rate for an EIDL loan?

The average interest rate for an Economic Injury Disaster Loan (EIDL) from the U.S. Small Business Administration (SBA) is 3.75% for small businesses and 2.75% for non-profit organizations.  So relatively low in today’s marketplace.

It’s important to note that the interest rate for an EIDL loan can vary based on a number of factors, including the size of the loan, the creditworthiness of the borrower, and the type of loan (e.g., small business or non-profit). The SBA sets the maximum interest rate for EIDL loans, and the actual interest rate offered to a borrower may be lower than the maximum rate.

Additionally, it’s important to keep in mind that the EIDL program is subject to change and the interest rate offered at the time of your loan application may be different from the current average interest rate.

As people begin to receive payment notices for EIDL loans, it’s important to note that EIDL loans are dischargeable in a bankruptcy.  Please consult with a bankruptcy attorney to evaluate the best way to approach this debt, whether in or out of a bankruptcy.

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