An economic injury disaster loan or EIDL loan with a small business loan program that businesses apply for in the event of a declared disaster. Companies with substantial damage from floods, hurricanes, tornadoes, and wildfires use the funds from this program for repairs, payroll, and other necessary business expenses.
To meet eligibility requirements, you must be unable to obtain credit elsewhere. There’s also a collateral requirement on loans over $25,000
The COVID-19 Economic Injury Advance program provides funding to help small businesses recover from the economic impacts of the pandemic. Unfortunately, funding has run out since May 6th, 2022, and the programs are now closed. Fortunately, there are other funding options for businesses in need of emergency funding now.
The most popular loan options are SBA Microloans and SBA 7(a) loans from the SBA. Microloans offer up to $50,000 while 7(a) loans beat EID Loans with a $5 million maximum. With 7(a) loans, you can purchase equipment and acquire a business. An EIDL only allows funds for operating expenses and business debt.
These are traditional loans where you borrow a sum of cash upfront and repay over a specific term. Term loans, with fixed interest rates, come in varying lengths, from 1 to 25 years. Term loans can be used for business purposes, not just disaster relief, such as buying equipment, real estate, or working capital.
Business Line of Credit
This is an excellent option if you’re looking for a loan that acts like a credit card. You can withdraw any increment you need. You also pay interest on the amount you use.
A bridge loan is a short-term loan designed to give you financing before your business can secure long-term funding. It offers immediate cash that can help you take advantage of time-sensitive opportunities. These are good options for companies that need a short-term cash injection and know they can meet the short repayment terms.
Technically, invoice factoring is not a loan. You sell your invoices at a discount to a factoring company in exchange for a lump sum of cash. There’s a higher chance of getting approved since collateral, credit score, and loan history aren’t significant factors for eligibility.
Merchant Cash Advance
An MCA gives you an upfront sum of cash in exchange for a slice of your future sales. Instead of making one fixed payment monthly, you make daily or weekly payments, plus fees, until the advance is paid. It’s more of a last resort financing option, but it is easy to qualify for, unlike other options with more strict requirements.
Many financing options can be even better than the SBA EIDL program depending on your situation. You can get excellent terms and quick financing to grow your business with First Union Lending.
First Union Lending is Here to Support You
First Union Lending offers numerous financing programs designed with small businesses in mind. Our business loans are fast and flexible, with financing options ranging from $5,000 to 2 million dollars. Call today to learn more about our various financing solutions to help your business grow and become successful.