When Can a Florida Business Obtain an EIDL Loan?

If your South Florida business is struggling financially due to an unexpected event or occurrence, you may be exploring potential loan options to help keep your company afloat. Given that they were the subject of significant news coverage for many years, you may know about the Economic Injury Disaster Loan (EIDL) program that helped to get many Florida businesses through the COVID-19 pandemic, and you may be wondering about the possibility of an EIDL loan.

In short, a business can only obtain an EIDL loan under particular circumstances. Our West Palm Beach business lawyers can explain in more detail.

Which Types of Businesses Can Seek EIDL Loans?

First, it is important to understand that EIDL loans through the US Small Business Administration (SBA) only become available under certain circumstances, which we will explain in more detail below. When an EIDL loan is a possibility for a business, then this type of funding, according to the SBA, can be an option for several types of businesses, including “small businesses, small agricultural cooperatives, and private nonprofit organizations.”

In order for any of these types of businesses to be eligible to receive an EIDL loan, they must be “located in a declared disaster area” and must “have suffered substantial economic injury.”

What Counts As a “Declared Disaster Area” and “Substantial Economic Injury”? 

For purposes of obtaining an EIDL loan, what counts as a “declared disaster area” and “substantial economic injury”? During the COVID-19 pandemic, there was an unprecedented financial impact that resulted in specific EIDL COVID-19 loans. For more common EIDL loan possibilities, the applicant must first be located in a declared disaster area. A declared disaster area is a place for which there has been a Presidential disaster declaration, which is typically made following a governor’s request. Then, according to FEMA, “based on the governor’s request, the President may declare that a major disaster or emergency exists, thus activating an array of Federal programs to assist in the response and recovery effort.”

For example, in the aftermath of Hurricane Milton in October 2024, a disaster declaration covered Florida counties that included Broward, Collier, Glades, Hendry, Martin, Miami-Dade, Okeechobee, and Palm Beach, allowing small businesses in those counties to seek EIDL loans.

Next, the term “substantial economic injury” is defined by the SBA to mean “the business is unable to meet its financial obligations and pay its regular and necessary operating expenses.” The SBA is clear that a loss of anticipated profits or a decline in a business’s sales is not sufficient to meet the requirement of “substantial economic injury.”

Contact a West Palm Beach Business Law Attorney Today 

Given that hurricane season commonly brings financial concerns to South Florida businesses, it is essential for small businesses in West Palm Beach and the surrounding area to know about possible EIDL loan options in the event of a disaster. If you have questions about the process for obtaining an EIDL loan, or if your business is struggling to repay an EIDL loan, an experienced West Palm Beach business attorney at Kelley, Fulton, Kaplan & Eller can assist you. Contact us today for more information.

Sources:

sba.gov/funding-programs/disaster-assistance/economic-injury-disaster-loans

fema.gov/pdf/rrr/dec_proc.pdf

sba.gov/article/2025/01/23/sba-offers-relief-florida-small-businesses-private-nonprofits-hit-hurricane-milton-low-interest