Skip Navigation or Skip to Content

EIDL Loan Requirements for Restaurants

In response to the ongoing pandemic, President Trump signed the Coronavirus Aid Relief and Economic Security (CARES) Act into law in March 2020. The CARES Act was geared towards providing relief to small businesses, including restaurants, via tax relief and forgivable paycheck protection loans. The goal was to provide an incentive to business owners to invest in business infrastructure and improvements.

Consequently, restaurants are now eligible for the Small Business Administration’s (SBA) and Economic Injury Disaster Loans (EIDL). Read on to learn what EIDL means and understand the EIDL requirements.

Economic Injury Disaster Loan: What You Need to Know  

What Is It?

The SBA COVID-19 EIDL program is designed for small businesses substantially impacted by the pandemic. The EIDL can be used to cover working capital and operational costs, including the cost of rent and utilities. Restaurant owners can also leverage the funds to settle mortgage obligations or payroll to minimize the effects of COVID-19 on the business.

There are two types of EIDL, the COVID-19 EIDL and the Non-COVID EIDL. The Non-COVID EIDL is not a new program and has been available to businesses that suffer from disasters such earthquakes, floods, etc.

How Much Money Can You Receive?

For COVID-19 EIDL, the loan amount is determined by the SBA, and the available cap for the total loan amount is set at $500,000.

For the Non-COVID EIDL, the cap is set at $2 million.

EIDL Loan Requirements

Restaurants that have been in operation as of January 31, 2020 and employ less than 500 individuals qualify for each type of EIDL. If your restaurant checks these two boxes, you are eligible to apply for the EIDL. EIDLs will have collateral requirements for loans over $25,000.

Are EIDL Loans Forgivable?

Unlike the more common Paycheck Protection Program Loans (PPP, 7(a) loans), the EIDL is not forgivable. However, if you have applied for an EIDL due to economic damage caused by the pandemic, you can look into options like refinancing your EIDL under the 7(a) loan program. As a result, you may be able to benefit from the loan forgiveness provisions that come with the 7(a) loan program.

Earlier in 2020, there were loan advances of up to $10,000 that are non-taxable income. This advance is no longer available.

Windes Can Help You Make the Right Decision Today

It is essential for small business owners, including restaurant owners, to be aware of all the financial assistances available to them and make intelligent business decisions about loans and leverage the relief options offered by the government to remain operational during these unprecedented times. However, it can be challenging to understand the complexities of the process.

Contact Windes to learn more about your options and our financial services, including audit & assurance, tax planning, bookkeeping, accounting services, and more.

For questions or more information about this article, please contact our tax professionals at or toll free at 844.4WINDES (844.494.6337).
Payments OnlineTaxCaddy
Secure File TransferWindes Portal