Small businesses affected by the September 11 terrorist attacks have one last chance to apply for the SBA's Economic Injury Disaster Loans (EIDLs): The deadline, which has been extended twice thus far, is now May 22.

To qualify for an EIDL, a small business must prove substantial economic injury as a direct result of the terrorist attacks or a federal action taken in response to the attacks. The disaster loans are designed to provide eligible small businesses with the working capital needed to pay standard operating expenses--such as fixed debts, payroll and accounts payable--they are unable to pay as a result of the attacks.

Since September 11, the SBA has approved $715 million in disaster loans nationwide, according to the SBA. Of that, $380 million went to business owners and residents of the original declared disaster areas in New York City and Northern Virginia and the surrounding areas.

Small businesses can apply for a working capital loan of up to $1.5 million, at an interest rate of 4 percent with a maximum term of 30 years. The SBA determines the payment amount, the terms and the amount of economic injury for each business--so be prepared to present solid financial data proving your business's need for a disaster loan.

Businesses may also qualify for disaster relief under a separate program started in April, the SBA's Supplemental Terrorist Activity Relief (STAR) program, which has an additional $4.5 billion in funding for 7(a) loans available. Small businesses can apply for STAR loans--available until funds run out or January 2003--if they can show the lender direct or indirect adverse impact as a result of the terrorist attacks, such as:

  • difficulty in making loan payments on existing debt
  • difficulty in paying employees or vendors
  • difficulty in purchasing materials, supplies, or inventory
  • difficulty in paying rents, mortgages, or other operating expenses
  • difficulty in securing financing

For an online application and instructions on applying for an EIDL, go to www.sba.gov/disaster/eidl.html. For information on the STAR program, call (800) U-ASK-SBA.