SBA disaster loans and EIDL: how they work (2026)
SBA business disaster loans and Economic Injury Disaster Loans (EIDL): who qualifies, up to $2 million, rates of 4% or less, collateral, uses and how to apply.
Published · 8 min read · By the AceTheSBA team
Key points
- SBA disaster loans are direct loans from SBA, not banks, for businesses and most private nonprofits in a declared disaster area.
- Physical damage loans repair or replace property; Economic Injury Disaster Loans (EIDL) provide working capital. The combined maximum is $2 million.
- Rates are fixed: no more than 4% if the business cannot get credit elsewhere. Terms run up to 30 years, and EIDLs have no interest and no payments for the first 12 months.
- Insurance and other compensation are deducted from the loss, and each declaration has its own filing deadlines.
When a disaster is declared, SBA disaster loan assistance makes SBA a direct lender. Unlike every other SBA program, there is no bank in the middle: you apply to SBA, and SBA approves, funds and services the loan. For businesses in the declared area, these are some of the lowest-cost, longest-term loans available.
Two kinds of business disaster loan
Physical damage loans
These repair or replace property damaged by the disaster:
- Real estate
- Machinery and equipment
- Fixtures and inventory
- Leasehold improvements
Businesses of any size and most private nonprofits can apply. After an approved loss, the loan can be increased for mitigation, such as a safe room or retaining wall, by the lesser of the cost or 20% of the verified loss.
Economic Injury Disaster Loans (EIDL)
An EIDL provides working capital to cover ordinary expenses the business cannot meet because of the disaster:
- Fixed debt payments
- Payroll
- Rent and utilities
- Health care benefits
It cannot pay for expansion, fixed assets, repairs, refinancing or payments to owners. Lost profits or lower sales alone are not substantial economic injury: the business must be unable to meet its obligations. EIDLs are for small businesses, small agricultural cooperatives and most private nonprofits, and you do not need physical damage to qualify.
Amounts, rates and terms
| Physical damage | EIDL | |
|---|---|---|
| Maximum | $2 million | $2 million combined with any physical damage loan |
| Rate, no credit elsewhere | Fixed, 4% or less | Fixed, 4% or less |
| Rate, credit available elsewhere | Fixed, up to 8% | Not eligible |
| Term | Up to 30 years | Up to 30 years |
| First 12 months | Standard terms | No interest accrues and no payments are due |
SBA sets the term based on your ability to repay, so not every loan receives 30 years.
Collateral
- Required for physical damage loans over $50,000 in Presidential declarations, or over $14,000 in agency declarations
- Required for EIDLs over $50,000
- For loans of $200,000 or less, SBA does not require your primary residence if other assets of equal quality and value are available
- SBA does not decline a loan for lack of collateral alone
How insurance affects the loan
Insurance proceeds, gifts and other compensation are deducted from the loss. If you have filed a claim but not been paid, you can still apply. If insurance pays after the loan is disbursed, you must pay that money to SBA as a principal payment. Keep every insurance letter and settlement.
What you need to apply
The business application (SBA Form 5, or the online application) comes with:
- IRS Form 4506-C, signed by the business, each owner of 20% or more, each general partner or managing member, and any owner of more than 50% of an affiliate
- A complete copy of the most recent federal income tax return
- SBA Form 413, a personal financial statement, from each 20% owner, general partner or managing member
- A schedule of liabilities listing existing business debts; SBA Form 2202 can be used
SBA may ask for more within 7 days, such as owners’ tax returns or a year-to-date profit and loss statement. For physical damage, also gather photos, repair estimates and the insurance policy. For economic injury, gather records showing the drop in revenue and the bills you cannot pay.
Deadlines
Each disaster declaration has its own disaster number and filing deadlines, published on SBA’s disaster site. Physical damage deadlines usually close well before EIDL deadlines, so check both as soon as a declaration covers your county. Applying early does not commit you to accepting the loan.
Steps after a disaster
- Document the damage with photos and video before cleanup, if it is safe.
- File your insurance claim right away.
- Confirm your county is in a declaration and note the deadlines.
- Apply to SBA online with the required forms.
- Track every expense and payment received, because compensation affects the loan amount.
This article reflects SBA’s disaster loan program as published on sba.gov in October 2026 and 13 CFR Part 123. Terms for each declaration are set in its official notice.