Do You Have to Pay Back an EIDL Loan?
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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.
EIDL Loan vs. EIDL Advance
EIDL Loan
EIDL Advance
Be located in a low-income area. (Use this SBA mapping tool to check.) Experience a revenue reduction of 30% or more for at least eight weeks since March 2, 2020. Have a maximum of 300 employees.
Be located in a low-income area. Experience a revenue reduction of 50% or more for at least eight weeks since March 2, 2020. Have a maximum of 10 employees.
EIDL Loan Terms
Maximum interest rate of 4% $2 million maximum loan amount Repayment period up to 30 years Collateral required for loans of $25,000 or more
Maximum interest rate 3.75% for businesses, 2.75% for nonprofits $2 million maximum loan amount (this amount was originally $50,000 but has been raised) Repayment period up to 30 years Collateral required for loans of $25,000 or more Personal guarantee for loans $200,000 or more
Extended EIDL Deferment Periods
2020 EIDL Loans: Both types of EIDL loans made in 2020 receive a total two-year deferment (original deferments lasted only one year). 2021 EIDL Loans: Both types of EIDL loans made in 2021 receive a total 18-month deferment (original deferments lasted only one year). EIDL Loans Prior to March 2, 2020: EIDL loan borrowers who received funds before the pandemic hit the U.S. in March 2020 received two deferrals that ultimately deferred payments until March 2021. Since then, the SBA has announced an additional 12-month extension lasting until March 31, 2022.
Which Types of Loans Are Forgivable?
PPP First-Draw Loan Forgiveness Eligibility
Maintain employee and compensation levels Spend loan funds on payroll and other eligible expenses Spend at least 60% of loan funds on payroll
PPP Second-Draw Loan Forgiveness Eligibility
Continue to maintain employee and compensation levels Spend loan funds on payroll and other eligible expenses, which were expanded during the second round Spend at least 60% of loan funds on payroll
Paying Back an EIDL Loan
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The Takeaway
About the Author
Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.
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