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How Long Does It Take to Get EIDL Funds After Approval?

How Long Does It Take to Get EIDL Funds After Approval?; After you're approved for an EIDL loan, it may take a little time for your funds to be disbursed. Learn more from Lantern by SoFi.
Susan Guillory
Susan GuilloryUpdated September 16, 2021
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
If you haven’t heard of the Economic Injury Disaster Loan (EIDL), it helps small businesses negatively impacted by the COVID-19 pandemic. If you think your small business might be eligible, you might want to look into applying for one. These loans have some of the lowest SBA loan rates available and a 30-year repayment period.But before you apply, you might want to know how long it will take to receive EIDL funds after approval. After all, you may not have weeks or months to wait, given that your business may still be struggling and you might need working capital fast.In this article, we’ll discuss the process of getting an EIDL loan, as well as what the expected SBA loan deposit time is once you’ve been approved.

What Is the EIDL Loan?

Before we dive into how long it takes to receive EIDL funds, let’s review what the EIDL program is. Created by the Small Business Administration (SBA), this program is generally meant to assist businesses (and homeowners) in recovering from declared disasters like hurricanes or floods.But due to 2020’s coronavirus pandemic, the program added a special loan specifically for businesses hit the hardest by the pandemic and its shutdowns. The EIDL loan for COVID-19 has two components: The loan itself (which is not a taxable loan) and two Advances that some businesses qualify for. The loan must be repaid, but the Advances do not have to be paid back.The loans have SBA’s usual low fixed interest rates for a period of 30 years:
  • 3.75% for businesses
  • 2.75% for nonprofits
There is no prepayment penalty if you decide to pay off the loan early.

Who Should Apply?

If your business, like thousands of other small businesses in the US, has been affected by the coronavirus pandemic, you have probably struggled financially. The EIDL program is designed to provide financing to help businesses like yours continue normal operations (or as close to normal as possible) so they can get back on their feet.If you’ve had difficulty paying bills as your business has started to resume normal operations, you might benefit from an EIDL loan. If you’re ready to hire employees again and need a little cash in the bank to cover payroll, EIDL loans can help with that, too. 

How Much Can I Get in EIDL Funds?

The EIDL program allows qualifying business owners to borrow up to $2 million. The SBA will calculate EIDL loan amounts for a business based on its annual revenues, how much it has lost because of the pandemic, and how many employees it has.Note that collateral is required for EIDL loans greater than $25,000.There are also two Advance programs: the Targeted Advance and the Supplemental Targeted Advance. If you qualify, you can receive up to $15,000 that does not have to be repaid.

What Can I Use an EIDL Loan For?

Some SBA loans have particular requirements about what you can and cannot use loan proceeds for.The funds you get from the EIDL program, whether for the loan or the Advance, must be used for normal business expenses. These include the following:
  • Payroll
  • Healthcare benefits for employees
  • Rent 
  • Utilities
  • Fixed debt payments
  • Repairs
  • Replacing inventory
  • Prepaying commercial debt
  • Paying federal business debt

Getting Approved for EIDL Funds

The SBA has an online application for the EIDL programYou will be asked for the following:
  • Questions about your business, including its name, address, and Employer Identification Number (or Social Security Number if it’s a sole proprietorship)
  •  Annual revenues for the 12 months before the disaster
  • The cost of goods 
  • The number of employees you have
Generally, you'll need to be able to demonstrate the loss your business experienced because of the pandemic. Bear in mind, too, that from Sept. 8, 2021 to Oct. 8, 2021, the SBA will look only at loans of $500,000 or less. After that 30-day window, it will consider applications for larger loans. Once you submit your application, the SBA will review it to see if you qualify, both for the EIDL loan and the Advances.It’s important to fill your application out correctly to avoid delays in its processing.

How Long Does It Take to Receive EIDL Funds After Approval?

As for the time it takes from when you’re approved to when you actually get your SBA loan funds, it partly depends on you. If you’re approved for an EIDL loan, you’ll be sent an email with details on how much you’re eligible to borrow. Once you sign the agreement, loan proceeds will be deposited into your business bank account within five to 10 business days.When you apply, make sure you’ve correctly entered your business bank account number and routing number so that there’s no delay in your funds reaching your account.Here are the steps to getting your EIDL loan:
  • Step 1: Gather your information, including revenues and business details
  • Step 2: Apply for the EIDL loan online. It may take over two hours, so plan enough time.
  • Step 3: Wait for the SBA to review your application. (Remember that if you are applying for more than $500,000, your application will not be considered between Sept. 8, 2021 and Oct. 8, 2021.)
  • Step 4: Review your offer and sign the loan agreement.
  • Step 5: Wait for the funds to be deposited (5-10 business days) 

Do I Have to Repay an EIDL Loan?

As mentioned earlier, there are two parts to an EIDL loan. The first is the loan itself, which can be up to $2 million. You do have to pay back this loan. As of Sept. 8, 2021, you can defer payments on the loan for up to two years. The potential second part is an Advance. There are two different Advance programs, the Targeted Advance and the Supplemental Targeted Advance. Both are meant to help small businesses in low-income communities. The Supplemental Targeted Advance is aimed at even smaller businesses (with no more than 10 employees) who have suffered an even greater reduction in revenue than the Targeted Advance.The maximum amount you can receive in total from the two Advance programs (if you are eligible) is $15,000. To qualify for one or both of the two Advance programs, your business must do the following. For a Targeted Advance
  • Be in a low-income community
  • Demonstrate more than a 30% reduction in revenue over an eight-week period starting on March 2, 2020 or later
  • Have 300 or fewer employees
For a Supplemental Targeted Advance
  • Be in a low-income community
  • Demonstrate more than a 50% reduction in revenue over an eight-week period starting on March 2, 2020 or later
  • Have 10 or fewer employees
If you are approved for one or both of these Advance programs by the SBA, you do not have to pay back the funds, and the money is not taxable.

The Takeaway

Now that you know all about applying for EIDL loans, including how long it takes to actually receive the funds after approval, should you consider applying for one? If you qualify, it could well be a good avenue to explore as your business recovers from the effects of the pandemic. If you don’t qualify for the EIDL program, or if you want to explore other options for financing, you can apply for small business loans online with Lantern by SoFi and get multiple offers you can compare with just the click of a button.
Image credit: iStock/PCH-Vector
The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.SOLC0721130

Frequently Asked Questions

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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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