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What Does EIDL Stand For & What Is It?

What Does EIDL Stand For & What Is It?
Susan Guillory
Susan GuilloryUpdated December 23, 2021
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If you’ve paid attention to small business news amid the COVID-19 pandemic in the last year, you’ve probably heard about EIDL but perhaps didn’t know much about it or how it related to you and your small business. You’ve heard it’s a good thing to help businesses who are struggling right now, and you’d like to learn more.So what does EIDL mean? Why should you care about it?Let’s look at not only the EIDL meaning but also why you might want to explore emergency business loans like this one to help bolster your business.

What EIDL Stands For 

What does EIDL stand for? It stands for Economic Injury Disaster Loans. It’s a program created by the Small Business Administration (SBA) to help businesses that have been negatively impacted by natural disasters.Initially those disasters included things like floods, fires, and hurricanes, but when the pandemic hit, the SBA created an entire EIDL loan program just for small businesses hit hard by COVID-19.

What Are Economic Injury Disaster Loans (EIDL)?

Now that you know what the acronym EIDL stands for, let’s dive deeper into the EIDL meaning as it pertains to the coronavirus pandemic.In 2020, the SBA opened the COVID-19 EIDL program. Its parameters have changed over the past year, but currently, borrowers can get up to $2 million with loan terms of 30 years and 3.75% fixed interest.There are also two grants available to qualifying businesses as part of the EIDL program. The Targeted Advance provides up to $10,000 that does not have to be repaid if the businesses are:
  • Located in a low-income community
  • Experienced a 30% or more reduction in revenue during COVID-19
  • Have 300 or fewer employees
The Supplemental Targeted Advance provides an additional $5,000 to businesses that:
  • Have suffered a 50% or more decline in revenues 
  • Have 10 or fewer employees

What Are EIDL Loans Used For?

There are some restrictions on EIDL loan uses, though those have eased up with recent modifications in September 2021.The funds must be used for normal business expenses for companies who have suffered financial loss because of the pandemic. These expenses include things like:
  • Payroll
  • Rent/mortgage
  • Utilities
  • Other ordinary business expenses
Prior to September, businesses could not use funds to cover business debt, either from federal loans or other lenders, but now the EIDL loan proceeds can be used for these.

EIDL Advances vs Loans 

Called the Targeted Advance and Supplemental Targeted Advance–also referred to as EIDG, or EIDL Grant–these grants are focused on businesses in low-income communities hit the hardest by COVID. Here’s what you need to know about the difference between EIDL vs EIDG.
EIDL (Loan)EIDG (Grant)
Has to be repaidDoes not have to be repaid
Can borrow up to $2 millionCan receive up to $15,000

Considerations When Applying For EIDL Loans 

Here are a few things you need to know about the EIDL loans.


To qualify for an EIDL loan, your business must be located in the United States or designated territory and must have experienced financial decline because of the coronavirus pandemic. Owners, members, partners, and shareholders of 20% or more must be U.S. citizens, non-citizen nationals, or qualified aliens who have a Social Security Number.Also, your business must have 500 or fewer employees.

Approval Conditions 

You must also meet certain credit score requirements. If you are applying for a loan under $500,000, your credit score must be 570 or greater. If you are looking for a loan over $500,000, your score must be 625 or more.There may also be certain EIDL hazard insurance requirements to consider. Additionally, loans over $25,000 require collateral. Loans over $200,000 require a personal guarantee.


If you qualify, you can apply for an EIDL loan on the SBA’s EIDL portal. You’ll be asked questions about your business, your annual revenues, and your number of employees, as well as some qualifying questions.You’ll also be asked for information on you and any other owners, including your contact information and Social Security Number.The SBA will review your application and determine whether you will be approved for a loan, and if so, what amount you can receive.You may have a certain amount of funds in mind that you’d like to borrow. Using an EIDL amount calculator, you can see how much you would pay in interest over the duration of the loan repayment period.If you are approved, funds will be deposited into your business bank account.


The important thing to know is that the EIDL program is only accepting applications up to Dec. 31, 2021. After that, the SBA will continue to review applications that have already been submitted by that deadline, as well as reconsideration requests. But if you’re thinking about applying, the clock is ticking.

Alternatives to EIDL 

If you aren’t able to apply for an EIDL loan before the end of the year deadline, know that you still have other options to get small business financing.Banks, credit unions, and online lenders may offer:
  • Long- and short-term loans
  • SBA loans (other than EIDL)
  • Lines of credit 
If you don’t have great credit, you may qualify for invoice financing, equipment loans, or a merchant cash advance. And a business credit card is also an option to help with your financing needs.

The Takeaway

Learning about the Economic Injury Disaster Loans and how they can help you through different types of emergencies may prove to be a turning point for your business. Getting informed about qualifications and deadlines is crucial.You can also compare business loan rates to explore different types of financing.
Photo credit: iStock/designer491

About the Author

Susan Guillory

Susan Guillory

Susan Guillory is the president of Egg Marketing, a content marketing firm based in San Diego. She’s written several business books, and has been published on sites including Forbes, AllBusiness, and Cision. She enjoys writing about business and personal credit, financial strategies, loans, and credit cards. Follow her on Twitter @eggmarketing.
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