The EIDL for Sole Props (and the Self-Employed)

By Brendan Tuytel on July 13, 2020

Editor’s note: As of July 13th, the up to $10,000 EIDL Advance Grant has closed due to funds running out. We can get you caught up to apply for the EIDL loan which is still open for applications. Learn more about the EIDL loan.

The EIDL is a disaster relief loan that was quickly dried up near the beginning of the COVID-19 pandemic. But as of June 15, 2020 the EIDL has re-opened to all small businesses, including sole props and the self-employed. Here’s everything you need to know.

What is the EIDL?

EIDL stands for Economic Injury Disaster Loan—it’s a low-interest government loan designed to support small businesses through disasters such as COVID-19.

  • Loan amount: Currently a maximum of $150,000
  • Interest rate: 3.75% for small businesses (2.75% for non-profits)
  • Loan term: 15-30 years
  • Bonus: You won’t have to make your first payment for 12 months

These rates are absurdly low. If your business needs extra capital, the EIDL is an excellent option.

Are sole proprietors eligible for EIDL funding?

Yes! The EIDL is not restricted to certain entity types. If you are self-employed or a sole proprietor that was in business prior to February 2020, you are eligible to apply for the EIDL loan and advance grant.

What is the EIDL grant?

The EIDL advance grant was an immediate injection of cash that you didn’t need to pay back and can use for any expenses to help out your business. The advance grant program was closed on July 11 when it had expended the $20 billion that was allocated to it. EIDL loan applications are still open, but you can no longer apply for the grant.

Calculating your EIDL loan amount

At this time, the SBA has not disclosed how your loan amount will be calculated outside of the fact that it will be based on two numbers you need to provide:

  • Gross sales revenue for February 2019 to January 2020

  • Cost of goods sold for February 2019 to January 2020

Cost of goods sold is the total cost associated with making or acquiring a good, meaning you should only have cost of goods sold recorded if you are selling a physical product. If you provide a service, your cost of goods sold number will be zero. Your gross sales revenue will be the total sales you completed in the date range before taking into consideration any costs or payment processing fees.

Good bookkeeping is essential in understanding what numbers you will need to be providing here. If you don’t have up to date books or a completed income statement to provide, Bench can help—we’ll do your 2019 books and provide the financial information you need to provide for the EIDL. Learn more.

How to apply

Applications are now open and can be started through the SBA’s Disaster Loan Assistance portal.

You will need to verify that you are eligible by selecting your type of business and checking off each box listing the SBA’s eligibility requirements. If you are unable to check each box, you may not apply.

In addition to information about your business and the 12 months of gross sales revenue and cost of goods sold numbers, you are also required to provide your Compensation From Other Sources Received as a Result of the Disaster. This entails any funds you received from additional grants or subsidies related to the pandemic.

Once that initial application is completed, the SBA will review your credit and a loan officer will contact you via the online portal, phone, or email to request additional documentation. If approved, you can accept or decline your loan offer and this will not impact your ability to keep your EIDL grant.

More EIDL and PPP resources


This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Bench assumes no liability for actions taken in reliance upon the information contained herein.

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