Everything You Need To Know About the $10,000 Small Business Loan

Small Business Loan Request Letter Everything You Need To Know About the $10,000 Small Business Loan

The $10,000 Small Business Loan—What You Need To Know

Small businesses were severely and undeniably hurt by the COVID-19 pandemic, and the U.S. government created relief programs to help the affected businesses recover. One of the relief programs that is still serving small businesses is the COVID-19 Economic Injury Disaster Loan (COVID-19 EIDL). Under this program, eligible applicants can secure a non-repayable $10,000 small business loan. This guide will explain the program requirements to help you determine if you are eligible.

If you have encountered challenges getting government or other small business loans, DoNotPay can help you present your financial needs in a convincing and professionally drafted loan request letter once you .

What Is the COVID-19 Economic Injury Disaster Loan (COVID-19 EIDL)?

The Small Business Administration (SBA) is a federal agency that partially guarantees loans for small businesses. Since the COVID-19 pandemic struck, the SBA has administered the COVID-19 Economic Injury Disaster Loan (COVID-19 EIDL).

Under the disaster assistance program, small businesses and nonprofits affected by the pandemic can secure loans of up to $2 million. These funds can be used for:

  • Covering the day-to-day small business expenses
  • Providing employee sick leave
  • Maintaining payroll
  • Paying past, current, and future debts

You cannot use the COVID-19 EIDL funds for the following:

  • Expanding the business
  • Paying startup costs for a new business
  • Making prepayments for federal agency loans (e.g., SBA loans)

Small Business Loan Advance

When you apply for the COVID-19 EIDL program, you may qualify for the small business loan advances. The available loan advances are:

  1. Targeted EIDL Advance—You can obtain a $10,000 small business loan if you conduct business operations in a low-income community area. The business should have not more than 300 employees and prove a revenue reduction of more than 30%
  2. Supplemental Targeted Advance—You can get up to $15,000 in advances if, in addition to operating in a low-income community, you have ten or fewer employees. You must also prove a revenue reduction of more than 50%

While you must apply for a COVID-19 EIDL to qualify for advances, you can receive them without accepting or obtaining the loan. If you are eligible, the SBA will send you an email inviting you to apply for one of the programs once they receive your COVID-19 EIDL application.

If you accept the COVID-19 EIDL, it must be repaid, unlike the advances.

COVID-19 EIDL Loan Terms

Understanding how small business loans work—particularly the business credit score requirements, loan terms, and funds usage—is crucial to determine and obtain the right loan for your enterprise’s budget.

Check out the COVID-19 EIDL loan terms in the table below:

Loan TermsDetails
Interest rates
  • 3.75% for small businesses
  • 2.75% for nonprofits
Repayment termsUp to 30 years
Personal guaranteeRequired for loans greater than $200,000
CollateralRequired for loans bigger than $25,000
FeesOne-time $100 fee for the loans of $25,000 and more

Eligibility Requirements for the COVID-19 EIDL

There are requirements that you and your business must meet to apply for the COVID-19 EIDL loans, for instance:

  • You must be physically located in the U.S.
  • You must have experienced loss in working capital as a result of the COVID-19 pandemic
  • Your enterprise should have a valid IRS-issued Tax Identification Number (TIN) except for sole proprietorships
  • Anyone who owns 20% or more of the business must have a valid Social Security number, regardless of their citizenship
  • Sole proprietors must have a valid Social Security number
  • The entity should have fewer than 500 employees, with some exceptions

How To Apply for the Economic Injury Disaster Loans (EIDL)

Just like for other types of small business loans, the application process for the EIDL program is dictated by the lender. The SBA requires you to follow these steps if you are applying for the first time:

  1. Ensure you are eligible by double-checking the requirements
  2. Fill out the COVID-19 EIDL Form
  3. Create your portal account via the SBA email invite and check the Steps to Complete section for further instructions
  4. Review your application and sign the documents
  5. Hit the blue Submit for processing button when you complete all the required steps

If your business has already received funds from the EIDL program and doesn’t have an outstanding loan, you can apply for an increased loan using the SBA portal account.

Required Application Documents

The required documents depend on the loan amount you are applying for. For all loan amounts, you must submit the ODA Form P-022—Standard Resolution, federal income taxes, and IRS Form 4506-T. If you want a loan amount that is more than $500,000, you will need to submit the following documents:

  • SBA Form 2202—Schedule of Liabilities
  • SBA Form 413—Personal Financial Statement
  • List of real estate owned by the business

Regardless of the loan amount, the SBA can request additional documentation during the review process—for instance, a copy of your profit and loss statement.

Need Help With Writing a Loan Request Letter? Use DoNotPay

Besides SBA loans, you may qualify for some of the best small business loans offered by different lenders, like banks and credit unions. Meeting the official requirements alone is not enough to help you obtain one. You must understand what lenders look for and write a convincing loan request letter.

Not sure if your letter is good enough? Get the best and most personalized loan request letter for startup loans or any other type within minutes with DoNotPay.

Once you complete the following steps, we will forward your letter to the lender of your choice instantly:

  1. Select the Business Loan Request Letter tool
  2. Enter your loan details
  3. Upload the required documents

DoNotPay can also help you identify the best potential lenders—just indicate that you need more help with finding one while filling out the questionnaire. We can present you with the best online lenders through our Find Online Business Loan Lender feature as well.

Deal With Any Small Business Matter With DoNotPay’s Help!

Being a small business owner is not an easy task, and all the details that you need to pay attention to might seem overwhelming. From handling trademark registration and protection to dealing with crucial paperwork, such as the Employer Identification Number (EIN) SS-4 form and 83(b) election forms, you need to invest a lot of time and energy into each business-related aspect. That is why you should rely on DoNotPay and have us take care of everything in your stead!

If you need help handling copyright issues, you should consider registering a DMCA agent with the U.S. Copyright Office. Not sure how to do it? Use DoNotPay, and we will take care of it for you!

We can also help you dispute chargebacks and avoid losing your money to scams by generating a personalized chargeback rebuttal document based on the info you give us.

Run Your Business Stress-Free

DoNotPay strives to make your business endeavors free of unnecessary stress, which is why we created a variety of useful products to help you deal with complex issues hassle-free. With our assistance, you can:

  • Draft a professional letter requesting a loan for your small business
  • Enjoy convenient faxing and mailing services
  • Get rid of fake negative reviews that could harm your business
  • Prove your commitment to your clients’ privacy by using DoNotPay’s Privacy Shield Self-Certification product
  • Avoid hiring lawyers or collection agencies as our Breach of Contract product will help you send formal demand letters to clients who refuse to pay for your services

Want your issue solved now?