EIDL Assists Inn During Pandemic
By Danny Monahan
Small Business Administration Vermont District Office
Following a stateside disaster declaration on March 20 due to the COVID-19 pandemic, Governor Phil Scott informed small business owners they could apply for an economic injury disaster loan through the Small Business Administration. Since that day more than 6,500 Vermont small businesses have received more than $436 million in EIDL funding.
One of the first small businesses in the state to receive an EIDL was The Four Chimneys Inn located in Bennington, Vt.
“My brother lives in China, so I was very in tuned with what was happening. I actually started researching the EIDL program before the disaster was even declared. I called the local SBA office and then applied and submitted as soon as I could,” said Lynn Green, who along with her husband Pete have owned The Four Chimneys Inn since 2005.
An EIDL is a direct loan through the SBA offered to small businesses and most private nonprofit organizations that have suffered a substantial economic injury where the business is unable to meet its obligations and pay its ordinary and necessary operating expenses due to a disaster. EIDL assistance is available regardless of whether the business suffered any physical property damage. It provides the necessary working capital to help small businesses impacted by a disaster survive until normal operations resume.
“We have owned this inn since 2005, so it was hard to take on debt this late in the game, but it was lifesaving. The EIDL loan had at such reasonable terms. And the application process was very streamlined and quick for a time of crisis. Normally to take out a loan of that size it be very lengthy and cumbersome,” said Green.
SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. The interest rate is 3.75% for small businesses and 2.75% for non-profit organizations, which are also eligible to apply.
“We had no idea how long this was going to last. Everyone had a hard time, but when it comes to lodging, we all have these big properties, that have big taxes and big mortgages and big insurance bills. Those payments don’t go away,” said Green.
Economic Injury Disaster Loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The Greens said they spent EIDL funds mostly on insurance, payroll, maintenance and local bills.
“Closing down in 2020 was terrifying, but we are having a really good summer and fall. We are so thankful it’s been so strong. We are still living day to day because of the unknown. But hopefully soon we will return to normal and get back on track,” said Green.
In early September, the SBA made significant changes to the EIDL program to further assist small business owners. EIDL funds can now be used to pay and prepay commercial debt and make payments on federal business debt, borrowers do not have to begin repayment until two years after the loan origination and the Covid-19 EIDL cap from $500,000 to $2 million.
For more information or to apply for an EIDL, visit www.sba.gov/eidl.