The Federal government’s Small Business Administration (SBA) Economic Injury Disaster Loan (EIDL) provides long-term, low-interest loans to stabilize nonprofit organizations (community associations) and small businesses experiencing a substantial economic injury as a result of the COVID-19 national emergency. The EIDL is used for working capital necessary until normal operations are resumed. EIDLs may not fund expenses like payment of dividends and bonuses, expansions of facilities, retiring federal debt (except IRS obligations), or relocation expenses.

Eligible entities are non-profits and small businesses (under 500 employees). Please check with your bank and other professionals for information regarding eligibility. Specifically, the following CAI members may be eligible.

  • Community associations (incorporated as a non-profit in their state)
  • Management companies
  • Association business partners

What constitutes a substantial economic loss?

  • The association or business is unable to pay ordinary operating expenses such as payroll, fixed debts, accounts payable, or other bills.
  • The association or business has reduced working capital, increased expenses, cash shortages due to frozen receivables, accelerated debts, and similar economic injuries.

EIDL Grant and Fast Cash Access
Once an application is received, SBA will advance up to $10,000 to the applicant within three days. If this advance is used to support obligations like payroll, paid sick leave for employees, and rent or mortgage payments the $10,000 emergency advance may convert to a grant that is not required to be repaid. Congress allocated $10 billion for these grants.

What are EIDL Terms? How much can be borrowed?
EIDL applicants must have an acceptable credit history and demonstrate an ability to repay the loan. The SBA indicated it will be flexible with applicants to offer maximum support during the COVID-19 national emergency.

Loan amounts (up to $2 million) and payment terms (up to 30 years) are based on an applicant’s financial circumstances and economic injury. Loan interest rates are capped at 2.75% for nonprofit organizations like community associations and 3.75% for businesses. Loans exceeding $25,000 must be collateralized. Community association assessment income streams are acceptable collateral for EIDLs.

 How Can My Association or Business Apply?
EIDL applications will be accepted through the SBA EIDL application portal: https://covid19relief.sba.gov/#/

Required Documentation and Forms

SBA strongly encourages applicants to download and manually complete required loan documents before applying. Download the information packet on Applying for SBA Disaster Loans (EIDL) here: https://www.sba.gov/sites/default/files/articles/EIDL_Information_and_Documentation_-_3-23-2020.pdf.

Congress waived some traditional EIDL requirements so applicants may not be required to provide all information below (i.e., tax returns). It is prudent to compile all information SBA may require prior to beginning an application. For detailed instructions,

Required forms for community associations:

Required forms for community association management companies and business partners:

Tips for Completing the Process
SBA reports its web-EIDL application portal is experiencing high traffic volume. To ensure your application process is easier—

  • Consider using the web-EIDL application during non-peak hours (early morning or evening)
  • Save your application progress regularly
  • Be sure to submit all required documentation—incomplete documentation causes delays
  • Be patient. SBA predicts it will take at least 2 hours to gather all information required to successfully apply.

Click here for information regarding FEDERAL GOVERNMENT ACTIONS during the COVID-19 pandemic, and CAI’s analysis on how these federal laws impact community associations.

Click here to download the CAI’s Guide to SBA Economic Injury Disaster Loan (EIDL). 

C. Scott Canady

C. Scott Canady

Scott Canady's 13 year record of public service includes experience gained in the U.S. House of Representatives and in the U.S. Department of Housing and Urban Development.

In Congress, Scott served as chief policy and political aide to a senior member of the House Financial Services Committee, working to reform the National Flood Insurance Program and improve the regulation of housing finance giants Fannie Mae and Freddie Mac.

Following his time in the Congress, Scott was appointed Deputy Assistant Secretary for Legislative Affairs at the U.S. Department of Housing and Urban Development. Scott served as a key legislative liaison with members of the House Financial Services Committee and the Senate Banking Committee.

In 2009, Scott began his partnership with Community Associations Institute by launching Tambala Strategy. Through this partnership, Scott has worked with CAI's members and leadership team to advance the views of common interest communities on a variety of issues including federal condominium standards, federal disaster assistance for community associations, and community association lien priority.

Scott is a graduate of Louisiana State University where he earned a Bachelor of Arts in Political Science and History.

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