Revised Guidance Issued for Small Business Loans Due to COVID-19

The Small Business Administration issued revised guidance for small businesses seeking economic relief as a result of COVID-19, also known as the coronavirus, on March 12, 2020.

Organizations who are suffering substantial economic harm from the pandemic can seek economic injury disaster relief loans (EIDLs) from the SBA for working capital.

Learn more about the availability, terms, criteria, and submission process below.


EIDLs are available to the following organizations in all US states and territories:

  • Small businesses
  • Small agricultural cooperatives
  • Most private non-profit organizations

Approximately 99% of the organizations listed above should qualify. A notable exemption is churches, which are considered religious organizations not funded by the SBA. However, if the church has a separate business—such as food delivery—that business could still qualify.

The cannabis industry is also excluded.


The terms are determined on a case-by-case basis. The ability to qualify for a loan from other entities doesn’t preclude the SBA granting the loan, and any previous disaster loan repayments are automatically deferred through the end of 2020.


The SBA is offering loans up to $2 million with long-term repayments of up to 30 years—with an automatic deferment of one full year.

Interest Rates

Interest rates are 3.75% for small businesses and 2.75% for not-for-profit entities.


There will be no early payment penalties.


The SBA doesn’t charge fees for the loan.


The loans aren’t meant to replace lost profits. The amount of loan is based upon working capital need—expenses that need to be paid but cannot due to the loss of revenue.

Definition of Small Business

The SBA has various benchmarks by industry for determining the size and scale of a small business. The determination is based on:

  • Average annual sales
  • Average annual number of employees

The limitations below could be impacted by the direction the SBA is being given based on the impact of COVID-19 and may be subject to change. The current emphasis is for the SBA to modify historical practices to expedite loans.

Organizations will be asked to self-certify their small business status as compared to others in their respective North American Industry Classification System (NAICS) code.

Among common larger industries, a short summary of historical criteria is listed below:

  • Agriculture. A maximum of $750,000 in average receipts is allowed.
  • Utilities. The maximum number of employees allowed ranges from 250 to 1,000 depending on the type of utility.
  • Manufacturing. The maximum number of employees allowed ranges from 500 to 1,500.
  • Information. The maximum number of employees allowed ranges from 500 to 1,500, and the maximum average of annual receipts permitted is $7.5 million to $38.5 million.
  • Finance and Insurance. The maximum number of employees allowed is 1,500, and the maximum average of annual receipts permitted is $32.5 million to $38.5 million.
  • Professional, Scientific, and Technical Services. The maximum number of employees allowed ranges from 1,000 to 1,500, or the maximum average of annual receipts permitted is $7.5 million to $20.5 million.
  • Health Care and Social Assistance. The maximum average of annual receipts permitted is $7.5 million to $38.5 million.

Submission Process

Traditionally, EIDLs require collateral for loans over $25,000. As a result of COVID-19, the SBA is moving to acquire general security interest in assets—and won’t use real estate to secure the loan even if it’s available—in order to expedite the process.

The standard application includes many questions relating to property damage, which may not be necessarily relevant to COVID-19. You can respond that these questions aren’t applicable and continue with the application.

The SBA also can move forward with your application even if you don’t have the most recent year’s tax return.

Business Start Date

Organizations started in 2019 can still apply.


Eligibility could be different for independently-owned businesses and franchises. Franchises will be required to provide additional information, but the first EIDL approval in the wake of COVID-19 was given to a California-based franchise.


Your organization can begin the application process online. The SBA encourages online applications as opposed to paper applications.

The steps are outlined below:

  • Submit SBA Form 5 and signed Internal Revenue Service (IRS) Form 4506T.
  • Demonstrate economic injury via loss in revenue—including anticipation of future loss—through the cancellation of contracts, events, conferences, and travel restrictions.
  • Post-submission, you will be notified and your organization will undergo a credit check.

The SBA has stated they will attempt to be more flexible with credit ratings.


If you feel your organization’s qualification is in doubt, you should still proceed with an application and be open to all programs. The process can take several weeks, but eligibility parameters are trending in favor of getting more funds out.

The SBA is anticipating further impact from Congressional approval in hopes that the association will be able to approve more loans at a faster rate. Changes continue to occur quickly. Check the SBA website for updates on a frequent basis.

Application Deadline

The deadline to apply is December 16, 2020.

For more information, or to apply online, visit the SBA website.

Applicants may also call the SBA’s customer service center at (800) 659-2955 or e-mail for more information.

We’re Here to Help

If you have any questions about applying for an EIDL, please contact your Moss Adams Professional.

Contact Us with Questions

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