Tips For Applying For An EIDL Loan & Grant

DoC reader SBA DRS left a comment to our previous EIDL post with some tips. A lot of people are confused about the process, so I thought it was worth passing along. Maybe we’ll get lucky and he’ll visit us here in the comments to answer any other questions readers have.

Here is the unaltered comment:

I am a Disaster Loan Specialist working at SBA, and I handle calls about EIDL and the EIDL Advance all day, nearly every day. I won’t deny that there is definite room for improvement in how SBA has handled COVID-19 EIDL, but it has over 5.5 million applications with only about 2,500 loan officers. It simply isn’t scaled to handle this crisis as efficiently as people seem to expect. So please do me and the rest of us a favor and do the following with your applications and followup:

1. Understand this program before applying. Even if you are applying only for the Advance, you are still ultimately applying for a loan at the same time. Your personal credit (not business credit) will get pulled… perhaps more than once in the process. It is not meant for expanding your business, relocating, acquiring new equipment, or paying off higher interest debt. It is meant for your operational expenses during the disaster (think rent, payroll, supplies, utilities, and monthly payments). This holds true for the Advance as well. It’s not supposed to be free money for you to spend on whatever you want.
2. Understand the Advance. It is not an automatic, free $10K for everyone. You can serve as an armchair attorney if you want to dispute how it’s supposed to work, but nevertheless, SBA will give you $1K per number of pre-disaster employees listed on the application. That’s actual employees… not independent contractors. If you’re taking PPP funds, then the Advance has little-to-no purpose for you since it will reduce your PPP forgiveness. And finally, despite SBA’s best intentions, it may not land in your account as fast as you want, so don’t pin your business’s hopes and dreams on it.
3. Check the Advance box. This may sound like a no-brainer, but every day, I hear from people who expect their Advance but their application doesn’t reflect that they ever requested it. Those folks usually want us to somehow change that on the application, but the reality is that it is highly unlikely that will ever happen.
4. Review all your data carefully. It may sound like it would be easy to change information at the drop of the hat, but SBA is a medium-sized bureaucratic agency in the midst of a crush of application. A mistyped email address or piece of bank information will cause you a lot of grief, and it may take weeks to change anything listed on your application or resend money. It amazes me that someone who owns a business would send in an official application full of errors… but it happens all the time.
5. Be patient. Calling customer service probably won’t affect any change to your application or Advance status. Agents can’t usually do much but document your concern, so you’re probably better off keeping your chill and waiting for an email or bank activity to understand your application status. (I can understand a once-a-week call or less after a couple weeks or so, but every day… no!)
6. Don’t take your frustration out on phone agents, and don’t demand to speak to a supervisor. If the phone agent can’t help you, 9 times out of 10, no one in customer service can. You can’t speak to a loan officer because they’re too busy processing applications to do applicant/borrower outreach. There are nearly no exceptions to that rule, so don’t be angry when you aren’t one.

I don’t intend to sound cocky here, but these are simple pitfalls and realities of this program, and they make up the majority of my day. If you know them up front, it will make them a lot easier to handle for everybody involved.