- Note: ask your insurance agent to specify Business Personal Property (BPP) instead of Personal Property, even on a Business Owner’s Policy. Coverage limits must be listed.
did you know that you are required to have hazard insurance with SBA EIDL loan?
EIDL Loan Eligibility
According to the SBA, “Small businesses, small agricultural cooperatives, and most private nonprofit organizations located in a declared disaster area and which have suffered substantial economic injury may be eligible for an SBA Economic Injury Disaster Loan (EIDL).”
To be eligible to receive an EIDL loan, you must:
- Show substantial economic injury, meaning your business cannot meet obligations to pay necessary operating expenses.
- The loan will cover working capital to help your business survive until normal operations resume.
- This loan is only available to small businesses when SBA determines they cannot obtain credit elsewhere.
COVID-19 EIDL Loan Requirements
During COVID, EIDL loans were extended to small businesses recovering from the COVID-19 disaster’s economic impact. Though the timeline to apply for a COVID EIDL loan has passed, these loans are still being audited. Proof of hazard insurance is required for collateralized loans of over $25,000.
At Competitive Edge, we recommend working with a specialist– who is familiar with the SBA’s hazard insurance requirements– to ensure your insurance complies with the loan requirements.
Hazard insurance requirements
For more information regarding your Economic Injury Disaster Loan (EIDL) insurance requirements, reach out the Brenda Jo directly:
Types of Disaster Loans
Business Physical Disaster Loans
If you are in a declared disaster area and have experienced damage to your business, you may be eligible for financial assistance from the SBA. Businesses of any size and most private nonprofit organizations may apply to the SBA for a loan to recover after a disaster.
Economic Injury Disaster Loans
If you have suffered substantial economic injury and are one of the following types of businesses located in a declared disaster area ,you may be eligible for an SBA Economic Injury Disaster Loan (EIDL).
Military Reservists Economic Injury Loans
The Military Reservist Economic Injury Disaster Loan (MREIDL) provides funds to help an eligible small business meet its ordinary and necessary operating expenses that it could have met, but is unable to, because an essential employee was called-up to active duty in his or her role as a military reservist.