The EIDL program is a loan that provides economic relief to small businesses and nonprofit organizations that are currently experiencing a temporary loss of revenue.

The following are the official eligibility criteria for applying for these SBA Disaster Assistance Loans (this information is subject to change Relief and Economic Security (CARES) Act).

Review this list and see if your business is eligible:

  • Applicant is a business with not more than 500 employees.
  • Applicant is an individual who operates under a sole proprietorship, with or without employees, or as an independent contractor.
  • Applicant is a cooperative with not more than 500 employees.
  • Applicant is an Employee Stock Ownership Plan (ESOP), as defined in 15 U.S.C. 632, with not more than 500 employees.
  • Applicant is a tribal small business concern, as described in 15 U.S.C. 657a(b)(2)(C), with not more than 500 employees.
  • Applicant is a business, including an agricultural cooperative, aquaculture enterprise, nursery, or producer cooperative, that is small under SBA Size Standards found at
  • Applicant is a business with more than 500 employees that is small under SBA Size Standards found at
  • Applicant is a private non-profit organization that is a non-governmental agency or entity that currently has an effective ruling letter from the IRS granting tax exemption under sections 501(c),(d), or (e) of the Internal Revenue Code of 1954, or satisfactory evidence from the State that the non-revenue producing organization or entity is a non-profit one organized or doing business under State law, or a faith-based organization.

Eligibility Checklist

Applicants must review and check all the following.

If Applicant is unable to check all of the following, Applicant is not an Eligible Entity:

  • Applicant is not engaged in any illegal activity (as defined by Federal guidelines).
  • No principal of the Applicant with a 50 percent or greater ownership interest is more than sixty (60) days delinquent on child support obligations.
  • Applicant is not an agricultural enterprise (e.g., farm), other than an aquaculture enterprise, agricultural cooperative, or nursery.
  • Applicant does not present live performances of a prurient sexual nature or derive directly or indirectly more than de minimis gross revenue through the sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature.
  • Applicant does not derive more than one-third of gross annual revenue from legal gambling activities.
  • Applicant is not in the business of lobbying.
  • Applicant cannot be a state, local, or municipal government entity and cannot be a member of Congress.

Audits & Fraud

If you have received government funds through one of the SBA loan programs, then you should know that these loans will be audited. The federal government has set up a special department called the Special Inspector General for Pandemic Relief (SIGPR). This department audits pandemic relief programs and prosecutes businesses and individuals for fraud, waste, or abuse.

What do you need to know and how can you stay out of trouble?

The Special Inspector General for Pandemic Relief (SIGPR) will be auditing and reviewing the SBA pandemic relief loans and looking for fraud, waste, or abuse. They will prosecute civil and criminal cases against individuals.

What are some examples of fraud, waste, and abuse?

Fraud, waste, and abuse can mean any number of things including, but not limited to, the following:

  • Not properly disclosing information on the other businesses you own in accordance with the SBA affiliate disclosure requirements
  • Applying for multiple loans for the same business under different names
  • Inflating your Average Monthly Payroll calculation
  • Not using your SBA funds for the program’s intended purposes
  • Not keeping the appropriate records to be in compliance with your SBA loan requirements
  • Not being truthful about the number of employees you have
  • Not disclosing receipt of SBA loan funds in an application for additional loan funds
  • Not notifying the SBA of a restricting or sale of the business, and much more.

What is the best course of action for avoiding trouble in an audit?

The best preventative actions you can take are ones you take before the audit.

  • Be truthful and honest in all of your application paperwork.
  • If you have made a mistake, disclose it to the SBA and if necessary, to SIGPR immediately.
  • Work with an attorney in making the self-disclosure.

We expect the Special Inspector General’s office to be lenient with those who self-disclose. Once you receive funds:

  • Make sure you are familiar with all of the terms of your loan and or grant.
  • Make sure you spend funds in compliance with the program.
  • Document how you are spending the funds so you have proof.
  • Submit follow-up documentation to the SBA as appropriate.
  • And reach out if you have any questions or concerns.

We know these programs are constantly changing and developing and that can be overwhelming especially with the added stress of the pandemic.

It is important, however, that you keep current with all the programs you have received money from so that you can be in compliance. In addition, you can have the documentation you need in the instance of an audit.