Understanding the SBA Economic Injury Disaster Loan Application Process

Mar 22, 2020

Information Gathered Regarding the US Small Business Administration Economic Injury Disaster Loan (EIDL) Program and Application Process

by Martha Londagin, Startup Junkie Foundation, Executive Consultant

On Friday, March 20, I participated in a national US Small Business Administration (SBA) webinar from the SBA Office of Disaster Assistance about the EIDL application process, Saturday I reviewed various guides from multiple SBA funded Small Business Development Center (SBDC) websites in various states that have been assisting business owners a few weeks longer than Arkansas, Arkansas’ ASBTDC website (asbtdc.org), and I called the SBA Disaster Loan assistance hotline at 1-800-659-2955 to ask questions I still had about the process. The information below is what I gathered to hopefully assist Northwest Arkansas small business applicants with deciding whether or not they want to apply and how to navigate the online application process.

Startup Junkie and Conductor previously published a more detailed “Get Ready Guide to Applying for an EIDL” that listed business documents and records needed to start the EIDL application, and it provides a link to all the SBA forms you will see in the application portal. This is a supplement to that guide.


I only had to wait 16 minutes for a representative to come on the line. His name was Nate. He was patient, respectful, knowledgeable, and very helpful. He answered many questions (answers below) and did not rush me at all. These are real people, dedicated government employees trained and paid to assist you. Show some patience; they want to help you. 


  • The SBA disaster loan website states that you “need to register with the Federal Emergency Management Agency (FEMA) to obtain a registration number…” before applying. That is for personal and real property damage only disaster loans like from a hurricane. This is NOT REQUIRED for an EIDL loan.

  • Any loan offered to you (sole proprietor) or your business by the SBA after reviewing your application will have a 12-month no-payments grace period or “deferral” starting the day the approved SBA loan note is signed. Interest at 3.75% APR will continue to accrue during the deferral period, but no payment will be due for 12 months. The amount of the loan, its terms, the length of the entire loan (months of repayments) are all to be determined by the SBA loan officer on a case-by-case basis, based upon each borrower’s ability to repay and documents provided by the borrower. That will all be presented to you and discussed with you by your SBA loan officer once the review is completed. These loans are DIRECT from the SBA. They do not go through a lender or bank like a regular SBA loan. 

  • Startups and very new businesses can apply for EIDLs. The business will need the appropriate documentation (business and financial) required that shows it is a viable business such as valid, detailed monthly cash flow projections, a business plan that was prepared for a lender, etc. The SBA typically seeks three years of business tax returns, profit-loss statements, and balance sheets, but the SBA 1368 form should be completed for startups as a projection calculator as well, along with this other information and documentation just like more established businesses. No businesses are assured of approval, but startups and very new businesses will be considered.

  • Loan funds for your sales and income losses will not be offered. The EIDL loans will potentially offer you 1-6 months of monthly working capital needs to cover the monthly fixed expenses necessary to continue to operate your business (See SBA Form 1368 which lists items such as fixed debts, accounts payable, payroll for employees, officer (owner) salary, utilities, mortgage payments/rent, etc. The link to this form is in our original “Get Ready Guide”)

  • Business tax return copies and possibly personal returns (especially for sole proprietors who file business returns on schedules in their personal returns) will have to be uploaded in the portal. The 4506 T form will have to be printed off and signed and scanned and uploaded. See our previous “Get Ready Guide” section about this form. Other information requests like that found in the lines of the SBA Form 413 Personal Financial Statement can be entered into the portal and will not have to be uploaded but can be emailed to the SBA if you choose. 

  • The application pages will offer you the option to email, mail, or fax documents or forms if you can’t upload them. EMAIL IS THE BEST OPTION IF YOU MUST DO THIS. MAKE SURE YOUR NAME, BUSINESS NAME, AND APPLICATION NUMBER ARE IN THE EMAIL. If you have documents that can help the loan officer and there isn’t the option to upload them (Profit Loss Statements, Balance Sheets, Projections, Business Plans, canceled contracts, etc.), email them in with proper identifying information and your loan application number.

An SBA loan officer will determine your eligibility during the processing of your complete application and review of the documents you provide. This process is expected to be 1-2 weeks. The SBA’s goal is to decide on your application within three weeks. A loan officer will contact you to discuss the loan amount recommendation and your next steps. Businesses that have access to conventional funding (lines of credit, other loan options, etc.) are encouraged to seek or use them. The SBA will conduct a “credit available elsewhere test” in the review to see if the business has sufficient cash flow to obtain a loan other than the EIDL. 

  • If your loan offer is OVER $25,000, there will be possible requirements about collateral pledges (liens) regarding business and personal (owner) assets that are available for such.  If a loan is approved, offered, and accepted (all in writing for you to review), the SBA will prepare and send Loan Closing Documents to you for your signature. Once they are signed by you, and the SBA receives the Loan Closing Documents, an initial disbursement up to $25,000 will be made within five days. The remaining funds, if any, of your loan offer will be disbursed once all collateral is appropriately secured if any is required. A case manager will be assigned to help you meet all loan conditions. The manager will also schedule subsequent disbursements until you receive the full loan amount approved and accepted and documented.  


NOTE: This guide is prepared by the Startup Junkie Foundation of Fayetteville, Ark. and Conductor of Conway, Ark. as a courtesy guide. All information contained herein is gathered from public resources currently available and is not an official publication of, nor endorsed by the US Small Business Administration, any government authority, or associated with any bank offering SBA loan products or business loans.