How this calculator works
The Economic Injury Disaster Loan programme lent working capital to small businesses affected by a declared disaster. In its COVID-19 form the maximum loan was twice the business gross profit, calculated as gross receipts minus cost of goods sold over the prior twelve months. Loans carried a 3.75% interest rate for small businesses over thirty years, with a twelve-month deferral of payments. This calculator applies those figures. Congress ended the programme, and the SBA later imposed caps on total loan size, so the amount here is a programme-era estimate rather than a current offer.
Formula
Eligible gross profit = gross receipts - cost of goods sold. Maximum loan = 2 × eligible gross profit. Monthly payment = maximum loan × i / (1 - (1 + i)^(-n)) with i = 3.75% / 12 and n = 360 months. Total interest = 360 × monthly payment - maximum loan.
Worked example
Gross receipts of $500,000 and cost of goods sold of $200,000 give eligible gross profit of $300,000, so the maximum loan is $600,000. At 3.75% over 30 years the payment is $2,778.69 a month, the total of payments is $1,000,329.68 and interest is $400,329.68. Interest at the start of repayment is about $61.64 a day.
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Frequently asked questions
Is the programme still open?
No. The EIDL programme stopped accepting new applications, so this calculator reconstructs the programme arithmetic for planning or historical comparison.
What could the loan be used for?
Working capital and normal operating expenses such as payroll, rent and accounts payable that could have been met had the disaster not occurred. It was not for fixed-asset improvements or expansion.
Was there a grant as well?
There was an advance of up to $10,000 that did not have to be repaid, reduced by any PPP forgiveness for the same costs. It is not included in this loan estimate.
Why is the term thirty years?
The SBA set a maximum thirty-year term for these loans to keep payments affordable. A shorter term would raise the payment and lower total interest.