I recently applied for the EIDL loan and was very surprised about how short and quick the application process was. Before I get into my 3 key takeaways, let me give a quick overview of what it is and who qualifies:


The loan is designed for Small Businesses, Sole Proprietor, Independent Contractor and Non-Profits. The applications are administered by the Small Business Administration. Notable qualifications and loan details are as follows:

  • • Business must employ less than 300 employees
  • • Be located in Low Income Community
  • • Experience 30% loss in sales (economic loss) in 8 week period covering 3/2/20-12/17/21
  • • There’s a $10,000 Advance feature which is based on # of Employees
    – provides $1,000/Employee up to 10 people (may no longer be available)
  • • Advance doesn’t have to be repaid and is considered Working Capital
  • • Loan and can be used for normal OPEX plus Fixed Debts, A/P and Payroll
  • • Not intended for lost sales, profits, expansion or Long Term Debt
  • • 30yr fixed rate at 3.75% for businesses and 2.75% Non-Profits
  • • Loan more than $25k requires collateral and Security Agreement
  • • Cannot compete with Private Sector lending or buy new Capital Assets
  • • Max $2M loan amount and can be combined with physical disaster loan

Now that I’ve covered the basics of qualification, use of funds and the loan details, here are my 3-takeaways from working through the application:


  1. 1. It’s quick and easy to apply….only takes 10 minutes if you’re prepared
    • • Complete your personal and business profile
    • • Classify the business entity and line of work (Retail Trade, Manufacturing, etc.)
    • • Provide identification (EIN/SS, DOB, etc.)
  2. 2. Complete the financial section which only asks for Gross Sales and COGS
    • • If you’re a Sole Proprietor/Independent Contractor and don’t have traditional COGS, think of Cost Of Services provided instead.
    • • Focus on what impacts generating the sales transaction.
    • • Raw Materials, Labor, Commissions, Product Purchases, Shipping Costs, Merchant Account Fees and things that Directly impact Sales.
  3. 3. Certify whether you’ve a run-in the law, which includes:
    • • Being convicted of a crime or the subject of an indictment.
    • • Been suspended from contracting with the Gov’t or receive Grants.
    • • Recently been arrested.

Take your time to think about item #2 as this will directly impact your ability to qualify. Click here for more detail and a sample calculation for a Beauty Salon.