EIDL Loans

myanydaycashJuly 3, 2023075 views

Economic Injury Disaster Loans (EIDL) are a crucial component of the U.S. Small Business Administration’s (SBA) efforts to help businesses navigate the challenges of disasters and pandemics. These low-interest, long-term loans offer much-needed capital to help businesses recover and rebuild. However, understanding EIDL loans’ terms, usage, and implications can be daunting for many business owners.

An EIDL loan offers fiscal aid to enterprises suffering significant economic harm due to a proclaimed catastrophe. This harm can be characterized as the business’s inability to fulfill its commitments or cover customary and indispensable operational costs. EIDL loans supply the crucial working funds required for small businesses to endure and continue operations following a disaster.

What are EIDL Loans?

An EIDL loan is a financial lifeline the SBA provides to small businesses, private non-profit organizations, and agricultural businesses affected by declared disasters. The critical characteristic of EIDL loans is that they are not meant to replace lost sales or profits; instead, they provide the necessary working capital to maintain a business’s viability during a disaster. Moreover, one does not have to accept the total amount offered by the SBA, as the goal is to take on the least debt necessary to weather the storm. For more details on loan requirements, consider visiting the SBA Economic Injury Disaster Loan page.

EIDL loans are a part of the more extensive SBA disaster loan program. Other types of disaster loans include Home and Personal Property Loans, Business Physical Disaster Loans, and Military Reservist Economic Injury Disaster Loans. The SBA also offers a Supplemental Targeted Advance as part of the EIDL program to provide the most minor and hardest-hit eligible businesses with a supplemental payment of $5,000.

The repayment terms for EIDL loans are determined case-by-case, considering each borrower’s ability to repay. It’s crucial to remember that the SBA offers these loans directly, and they should be distinct from SBA 7(a) loans or Paycheck Protection Program (PPP) loans, which are offered through financial institutions and may have different criteria and terms.

EIDL Loans Application Process

The application process for an EIDL loan involves several steps. First, a business must verify its eligibility. This typically involves demonstrating that the business is located in a disaster-declared area, has suffered substantial economic injury, and meets the SBA’s size standards.

Once eligibility is established, the businesses and supporting documentation to the SBA. The SBA reviews the application, determines the loan amount based on the business’s financial needs, and issues a loan closing document. The SBA disburses the loan funds upon the borrower accepting the loan terms and conditions.

The SBA has also introduced an EIDL Advance as part of the loan application process. This program offers an advance of up to $10,000 to small businesses. The EIDL Advance does not need to be repaid and can be used for any business purpose, providing a valuable source of funds for businesses waiting for their EIDL loan approval.

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Usage of EIDL Loan Funds

EIDL loan funds ca purposes to help a business survive a disaster. These funds can cover working capital needs such as continuing health care benefits, rent, utilities, and fixed debt payments. However, they cannot be used for business expansion or refinancing debts.

One common question is whether EIDL loan funds can be used to pay oneself. The answer is generally yes, within reasonable limits. If the business owner takes a regular salary, EIDL funds can be used to cover this salary. However, the SBA would likely view a significant increase in the owner’s salary as a misuse of funds.

Similarly, using EIDL funds to pay off a car loan could be permissible if the car is used for business purposes. However, if the vehicle is not used for business, using EIDL funds for this purpose is likely inappropriate.

Repayment, Forgiveness, and Legal Implications

While EIDL loans offer generous repayment terms, including a maturity of up to 30 years and an interest rate of 3.75% for small businesses, it’s crucial to remember that these are loans, not grants. They must be repaid. If a business fails to make its loan payments, the SBA can declare the loan in default and take steps to collect if you need help struggling with EIDL loan repayment, check out our website’s Pay EIDL loan section.

The SBA has limited loan forgiveness options for EIDL loans. While the EIDL Advance (up to $10,000) does not need to be repaid, the rest of the EIDL loan is not eligible for forgiveness. This differs from PPP loans, which can be entirely forgiven if used for specific purposes. If a business owner cannot repay the EIDL loan, they may be personally responsible for the debt, especially if they guarantee the loan.

Impact of Business Changes on EIDL Loans

EIDL loans have certain conditions and restrictions that continue after the loan is disbursed. For example, if a business owner wants to sell their business, they must get the SBA’s approval if their EIDL loan still needs to be fully repaid. This also applies if the business owner wants to repay their loan early; while there’s no penalty for early repayment, the SBA must still be notified.

Business owners should also know that receiving an EIDL loan may impact their credit score. The SBA will typically perform a credit check as part of the loan application process. While the SBA’s credit requirements are generally more lenient than traditional lenders, a poor credit score may affect the business’s eligibility for an EIDL loan.

EIDL loans Frequently Asked Questions

What occurs if I’m unable to repay my EIDL loan?

The EIDL loan, like any other loan, is a legal commitment between the borrower and the lender, which in this case is the Small Business Administration (SBA). When a business cannot make the payments on its EIDL loan, it risks defaulting. Defaulting on an EIDL loan can lead to severe consequences. First and foremost, the SBA can resort to all legal means to recover the loan amount. This could include litigation and seizing assets used as collateral for the loan.
Moreover, since EIDL loans above $25,000 require collateral, failure to repay could result in forfeiture of the collateralized assets. Furthermore, your business’s credit rating can be adversely affected, which might make securing loans in the future complex. As defaulting on any loan is severe, it’s essential to consult with a financial advisor or SBA representative if your business cannot meet its loan obligations.

Does obtaining an EIDL loan impact my credit score?

The process of obtaining an EIDL loan does indeed impact your credit score. When you apply for an EIDL loan, the SBA performs a hard credit inquiry as part of the loan approval process. A hard credit inquiry can cause a temporary dip in your credit score. This is standard procedure for most loans, and the impact on your credit score is usually short-term.
Furthermore, once the loan is approved and disbursed, it gets reported to the credit bureaus. This means your repayment track record will affect your credit score. Regular and timely payments can positively influence your credit score over time. However, late or missed payments can negatively affect your credit score. Hence, planning for loan repayment is crucial to maintaining a good credit history.

Is it possible to use EIDL funds to pay me?

The EIDL funds aim to assist businesses experiencing a temporary loss of revenue. These funds are intended to provide working capital to help the business meet its financial obligations that could have been met if the disaster had not occurred. This includes payroll expenses, making it possible for business owners to continue paying themselves a reasonable salary from the EIDL funds.

However, it’s important to note that these funds cannot be used to enlarge the business owner’s wealth. The salary paid to the business owner must be reasonable, similar to what they usually receive from the business. Any excessive payments could be a misuse of the funds and could result in penalties. To avoid any mishap, it’s best to consult with an SBA representative or a financial advisor to ensure the appropriate use of the EIDL funds.

Are EIDL loans eligible for forgiveness?

Unlike the Paycheck Protection Program (PPP), specifically designed to provide forgivable loans to help businesses maintain their workforce during the pandemic, EIDL loans do not have a broad loan forgiveness component. In general, the EIDL loans must be repaid over the loan term.
However, the EIDL program includes the EIDL Advance, a grant of up to $10,000. This advance does not need to be repaid, essentially making it forgivable. But beyond the EIDL Advance, the loan itself is not forgivable. But as with all federal programs, rules can change, and it’s recommended to stay updated with SBA guidelines or consult with an SBA representative for the most accurate and recent information.

Are EIDL loans currently under investigation?

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Is it permissible to use EIDL funds to pay off a car loan?

EIDL loans are provided to businesses suffering from economic injury due to a disaster, helping them meet financial obligations and operating expenses which could have been met if the disaster had not occurred. Generally, these loans are not intended to refinance long-term debts like car loans.

However, if the car loan is a business expense, and the car is being used primarily for business purposes, it might be permissible to use the EIDL loan to service that debt. Using EIDL funds is a complicated issue with many potential implications, so it’s advisable to consult with a financial advisor or an SBA representative to understand what is and isn’t permissible.

Please note each business’s unique situation and the answers above should be used as a guide. Always consult an SBA representative or a financial advisor for advice tailored to your business’s situation.

What’s the outcome if my business closes while I have an outstanding EIDL loan?

If a business closes while there’s an outstanding EIDL loan, the loan typically does not disappear. The borrower is still liable to repay the EIDL loan. Under the EIDL loan program, the SBA may have secured the loan with business assets or, in some cases, the business owner’s assets. In the event of business closure, the SBA can resort to these assets to recover the loan amount.

However, the exact outcome depends on the circumstances surrounding the closure, the loan agreement, and whether bankruptcy is filed. The debt may be discharged in certain bankruptcy situations, but this must be discussed with a legal professional. It’s essential to communicate with the SBA and consider seeking advice from a financial advisor or attorney if your business is facing closure.

Do EIDL loans necessitate collateral?

EIDL loans over $25,000 require collateral. The SBA leverages a broad security arrangement (UCC), pinpointing business resources as collateral. These resources often include machinery, equipment, furniture, fixtures, etc. For loans of $200,000 or more, the SBA also requires personal guarantees from all 20% or more business owners. It’s important to remember that the SBA will not decline a loan for lack of collateral, but the borrower must pledge what is available.

Is the EIDL loan classified as income?

EIDL loans are not typically considered taxable income. These loans are a form of debt and must be repaid, so they are generally not included in gross income for tax purposes. However, if the loan is forgiven, it might be considered income, and taxes may apply. It’s always advisable to consult with a tax professional or a certified public accountant for the most accuraboutation related to your specific situation and recent tax laws.

Can I use my SBA loan for any purpose?

EIDL loans facilitated by the SBA aim to assist small businesses in bouncing back from economic distress triggered by a catastrophe. These loans are designed to satisfy crucial financial responsibilities and operational expenses that would otherwise have been met if the disaster had not transpired. As such, EIDL resources are to be utilized for essential working capital requirements, including fixed debts, payroll, accounts payable, and other obligations that cannot be fulfilled due to the disaster’s aftermath.

It’s important to note that there are restrictions on how these funds can be used. They cannot be used for physical repairs or expansions, dividend distributions, repayment of other SBA loans, or other uses. Misuse of loan funds can result in severe penalties, including criminal charges. Always consult with an SBA representative if you need clarification on the appropriate use of EIDL funds.

Remember, the answers provided are based on information up to my knowledge cutoff in September 2021. Always consult an SBA representative or a financial advisor for the most recent information and advice tailored to specific situations.

Can I sell my business while I have an outstanding EIDL loan?

Selling a business while there is an outstanding EIDL loan can be complex. It’s crucial to understand that when an EIDL loan is granted, the agreement includes a clause preventing the sale of the business or its assets without the SBA’s consent. This is because the EIDL loan is tied to the business owner and the business itself.

Before selling the business, it would be necessary to contact the SBA or the loan servicing center and explain the situation. They would guide you on the appropriate steps to take. One possible outcome might be that the proceeds from the sale of the business would first need to be used to pay off the EIDL loan before the owner can retain any profits.

Can I use an SBA loan to pay off business debt?

EIDL loans are explicitly crafted to deliver financial assistance to businesses presently dealing with a temporary decline in revenue. This financial aid can be employed to settle fixed debts, meet payroll, manage accounts payable, and cover other bills that are challenging to pay due to the detrimental effect of the disaster. In a sense, these could be considered “business debts.”

However, it’s crucial to understand that EIDL funds cannot be used for specific purposes like paying off other SBA loans or long-term debt. The aim is to cover operational expenses and alleviate economic injury due to a disaster. If you’re considering using an EIDL loan to pay off business debt, consulting with the SBA or a financial advisor would be best to understand the best course of action.

What are the consequences if the EIDL loan isn’t repaid?

Failure to repay an EIDL loan can lead to severe consequences. Since EIDL loans are backed by the SBA, defaulting on these loans can lead to the borrower’s assets being seized or a lien being placed on the borrower’s property. These actions can be taken because the SBA requires collateral for loans over $25,000 and loans over $200,000, personal guarantees from all 20% or more business owners.

If you cannot repay the EIDL loan, contacting the SBA as soon as possible is crucial. There may be options such as deferment, modification of the payment plan, or even potential forgiveness under certain circumstances. It’s also highly recommended to seek the advice of a financial advisor or attorney to understand all the potential implications and possible courses of action.

Which is more beneficial, PPP or EIDL?

The answer to this question depends on the specific needs and circumstances of the business. The Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) are designed to help businesses navigate financial challenges but have different terms and uses.

The PPP is primarily designed to help businesses retain their workforce during the COVID-19 crisis. The loan can be fully forgiven if the funds are used for payroll costs and other specific expenses over a specified period. On the other hand, EIDL is a more general-purpose disaster relief loan designed to meet financial obligations and operating expenses that could have been met had the disaster not occurred. Unlike the PPP, EIDL is not designed with forgiveness in mind, though some exceptions exist.

Therefore, the benefits between PPP and EIDL vary based on your business needs. For some businesses, a PPP loan could be more beneficial if they are primarily concerned with retaining staff and can meet the forgiveness criteria. For others with broader financial needs caused by a disaster, an EIDL loan could be more suitable. Consulting with a financial advisor can be beneficial in deciding between the two.

Please note that the PPP program has ended, as of my knowledge cutoff in September 2021. Always consult a financial advisor or the SBA for the most recent information.

Is the $10,000 EIDL advance eligible for forgiveness?

Yes, the EIDL advance or grant, which could be up to $10,000, is indeed forgivable and does not need to be paid back. This was part of the relief measures introduced under the CARES Act. The grant amount was determined by the number of employees a business had, with $1,000 allocated per employee, up to a maximum of $10,000.

However, it’s important to note that the forgivable advance could affect the forgiveness amount of a PPP loan if the business also received one. The EIDL advance is subtracted from the PPP loan forgiveness amount. For example, if a business received a $10,000 EIDL advance and a $50,000 PPP loan, the maximum forgiveness for the PPP loan would be $40,000.

Are business owners held personally responsible for EIDL loans?

The SBA EIDL loan program requires personal guarantees for loans over $200,000. A personal guarantee means that if the business cannot repay the loan, the guarantor (usually the business owner) is responsible for the debt. The SBA can potentially seize personal assets to recover the loan amount.

However, for loans less than $200,000, the SBA waived the personal guarantee requirement under the CARES Act. Regardless, the business assets are still at risk as they are used as collateral for these loans. Business owners need to understand the terms of their loans, as defaulting could lead to severe consequences, including foreclosure of business assets.

What transpires if I close my business while I have an outstanding EIDL loan?

Closing your business while having an outstanding EIDL loan complicates matters, as the loan is still due. The EIDL loan was given on the assumption that it would help a business survive during difficult economic times and would be repaid when it is back on its feet.

If the business closes, the SBA expects the owner to liquidate business assets to repay the loan. If the business assets do not cover the loan balance, the SBA may seize the collateral if any was provided. In large loans requiring a personal guarantee, the SBA could seize personal assets to satisfy the debt. If a business closure is imminent, it is advised to discuss the situation with the SBA or a financial advisor to understand the options available.

What happens if a business is unable to repay an EIDL loan?

If a business cannot repay an EIDL loan, the SBA can take action to recover the loan amount. The SBA can seize business assets or any collateral to secure the loan. In the case of EIDL loans larger than $200,000 that required a personal guarantee, the SBA could potentially seize personal assets to satisfy the debt.

In such circumstances, it’s crucial to communicate with the SBA or the loan servicing center. They may provide options like loan modification, payment plans, or deferment. If a business is facing such a situation, seeking advice from a financial advisor or attorney can be beneficial to understand the possible implications and courses of action.

Will EIDL loans be subject to future forgiveness?

As of my knowledge cutoff in September 2021, EIDL loans are not forgivable in the same sense as PPP loans are. The terms of EIDL loans state that the funds must be paid back over a 30-year term, with a 3.75% interest rate for businesses and a 2.75% interest rate for non-profit organizations.

However, the future possibility of EIDL loan forgiveness largely depends on any new legislation that Congress might pass. There have been proposals and discussions around the idea, but concrete decisions have yet to be made. If there are any changes to the EIDL loan forgiveness rules, the SBA will notify all EIDL loan recipients directly, and updates will be available on the SBA’s website.

Will the government eventually forgive EIDL loans?

There’s yet to be an official indication that the government will forgive EIDL loans. Unlike PPP loans, designed with forgiving in mind, provided certain conditions are met, EIDL loans were structured as traditional loans and are expected to be paid back.

That said, it’s always possible that legislation could change, particularly considering the ongoing economic impact of the pandemic. If you’re an EIDL borrower, it’s a good idea to keep an eye on communications from the SBA and news about relevant legislation in case there are changes to the terms of EIDL loans.

Can I use the EIDL loan as payment to myself?

Owners of businesses can use EIDL loan funds as working capital to continue operations, which may include an owner’s salary under certain conditions. It’s important to note that the loan cannot be used to expand or grow the business, but it can cover day-to-day expenses.

However, if the owner’s withdrawal constitutes a distribution rather than a salary—meaning it’s not a regular part of the way the owner gets paid—then the use of EIDL funds for this purpose could be considered not in line with the loan requirements. It’s always a good idea to check with a financial advisor or the SBA if you’re unsure what the loan can be used for.

What is the fate of the SBA loan if the business collapses?

If a business collapses and cannot repay its SBA loan, the SBA will enforce its claim on any collateral pledged to secure the loan. This could mean liquidating business assets to cover the outstanding debt. If the loan was personally guaranteed, the SBA could seize the guarantor’s assets to satisfy the debt.

However, the SBA also offers a compromise in some instances, which can involve the SBA accepting a lesser amount to satisfy the debt fully or offering longer repayment terms. This depends on the financial situation of the business and the guarantor, and it’s recommended to seek legal and financial advice before proceeding with any such decisions.

How can I get my SBA disaster loan forgiven?

The SBA offers loan forgiveness for certain types of loans, such as the Paycheck Protection Program (PPP) loans, but as of my knowledge, cutoff in September 2021, EIDL loans are not designed to be forgiven. EIDL loans are low-interest loans with a long-term repayment schedule that businesses are expected to repay.

However, should any changes occur in legislation or SBA policy regarding the forgiveness of EIDL loans, it’s recommended to stay updated with SBA communications and consult your financial advisor. It’s always crucial to understand the terms and conditions of any loan, especially when it comes to repayment and potential forgiveness.

How can I repay my EIDL loan?

Repaying your EIDL loan can be done through the SBA’s online portal. Payments can be made monthly or more frequently if you choose, and there is no prepayment penalty for EIDL loans. This means you could save on interest over time if you repay the loan faster.

Remember, the EIDL loan repayment term is 30 years, with a one-year deferment period from the loan approval date. While interest will accrue, your first loan payment will be due one year after the origination date. Remember that the SBA will send a monthly statement; staying on top of this is crucial to maintain your repayment schedule.

Are SBA loans subject to forgiveness?

Some SBA loans are designed with forgiveness in mind, such as the Paycheck Protection Program (PPP) loans, which can be fully forgiven if certain conditions are met. However, EIDL loans are only sometimes forgivable. They are low-interest, long-term loans designed to relieve businesses affected by disasters and are expected to be repaid.

However, it’s essential to understand the terms and conditions of your specific loan and keep abreast of changes to SBA loan policies. If any changes were to occur regarding the forgiveness of EIDL loans, the SBA would communicate this directly with loan recipients. Always consult with your financial advisor for the most accurate and timely information.

Is there a penalty for early repayment of an SBA loan?

No, there is no penalty for early repayment of an SBA loan, including EIDL loans. If you can repay your loan beforehand, you can do so without additional costs. Repaying your loan early could save you money over the long term by reducing the amount of interest you pay.

While it’s always essential to ensure that you can manage your repayments comfortably, it could benefit you if you can repay your SBA loan ahead of schedule. As always, discussing such decisions with a financial advisor is best to ensure it’s the right move for your financial situation.

Do EIDL loans get rejected?

Yes, EIDL loans can be rejected. There are several reasons why an application for an EIDL loan might be denied. These can range from the SBA needing more verifiable information about the business to the business needing to meet eligibility requirements such as size and type of business to the business owner’s credit history. It’s also possible for an application to be rejected if the SBA determines that the business can’t afford to repay the loan.

If your EIDL loan application is denied, the SBA will send a letter explaining the reasons for the denial. You have the right to request a reconsideration of your application within six months of the date of the decline letter. It’s also a good idea to review the eligibility criteria and the necessary documentation before applying to ensure your application has the best chance of being approved.

What is the maximum limit on EIDL loans?

As of my knowledge cutoff in September 2021, the SBA has set a maximum limit of $2 million for EIDL loans. This sum is intended to bring financial respite to businesses presently undergoing a temporary reduction in income due to an officially declared disaster.

It’s important to note that the loan amount you’re eligible for isn’t determined by your choice but rather by the economic injury your business has suffered, as calculated by the SBA. The goal is to assist businesses in fulfilling financial commitments and managing operational costs that they could have handled in the absence of the disaster.

Can I secure an SBA loan with a credit score of 570?

Credit scores play a role in the SBA’s decision to approve or deny a loan application. While there is no minimum credit score to apply for an EIDL loan, a lower credit score may affect your chances of approval. However, there are other factors the SBA considers. They also examine your ability to repay the loan and whether your business has suffered substantial economic injury due to a disaster.

Even with a credit score 570, it’s possible to be approved for an EIDL loan, but it may be more challenging. If you’re denied an EIDL loan due to your credit score, the SBA will inform you of this in their denial letter, and you’ll have the opportunity to request a reconsideration if you wish.

Is an EIDL loan classified as income?

As of my knowledge, cutoff in September 2021, EIDL loans are not considered taxable income by the federal government. You wouldn’t need to declare the loan amount as income on your federal tax return. The EIDL program intends to provide relief to businesses suffering from the economic effects of a disaster, and classifying these funds as income could potentially reduce their impact.

However, it’s important to note that while the loan itself isn’t considered income, any expenses you pay using the EIDL loan funds may not be tax-deductible. This could increase your taxable income. It’s always recommended to consult with a tax professional to understand the tax implications of an EIDL loan for your specific circumstances.

Can EIDL funds be used for debt repayment?

Yes, the Economic Injury Disaster Loans (EIDL) can be used for working capital needs and necessary business expenditures, which include paying off debt obligations that cannot be met due to the impact of the disaster. This includes accounts payable, payroll, and other bills that cannot be paid due to the disaster’s impact.

However, EIDL funds cannot be used for specific purposes, such as refinancing long-term debt or paying off other federal loans. Using the funds per SBA guidelines is essential to avoid potential legal complications. Always ensure you understand the terms and conditions of the EIDL loan before using the funds.

What distinguishes the EIDL loan from the grant?

EIDL loans and EIDL grants, also known as EIDL advances, are two components of the SBA’s disaster assistance program, but they differ in a few key ways. An EIDL loan is a low-interest loan provided by the SBA to cover economic injury caused by a disaster. The loan must be paid back over a specified term.

On the other hand, an EIDL advance is a grant that does not need to be repaid, even if the EIDL loan application is later denied. With a cutoff in September 2021, EIDL advances could provide up to $10,000 of economic relief to businesses experiencing temporary difficulties due to a declared disaster. The number of pre-disaster employees determined the grant amount, with $1,000 granted per employee up to a maximum of $10,000.

Is obtaining a loan from the SBA challenging?

Obtaining a loan from the SBA can be challenging, as it requires meeting specific criteria and going through a detailed application process. The SBA will review your credit history, your business’s financials, and other documentation to determine if you qualify for the loan.

However, the SBA has made efforts to make the process more accessible and understandable for business owners, especially during times of economic distress caused by disasters. Tools and resources are available on the SBA website to guide you through the application process. And remember, while the process may seem daunting, these loans are designed to help businesses recover from disaster, so it’s worth considering if you’re eligible.

Can I pay myself a salary with EIDL funds?

Yes, if you are a sole proprietor or an independent contractor, you can use the EIDL funds to pay yourself for services you could have performed were it not for the disaster. This amount should reflect the income you earned during the disaster period.

Remember that the EIDL program is intended to replace lost income due to a disaster and help businesses continue operating until normal operations can resume. However, these funds cannot be used for business expansion or bonuses. It’s essential to keep thorough records of your EIDL funds, as the SBA may audit your use of the funds to ensure they were used appropriately.

Conclusion: EIDL Loans

As we conclude, EIDL loans stand out as a beacon of hope for businesses undergoing substantial economic hardships brought about by declared disasters. They offer a lifeline by providing necessary working capital that sustains business operations until they bounce back to normalcy. These loans, extended through the Small Business Administration, aim to cover the economic injury inflicted on businesses, ensuring their survival and subsequent recovery.

Though acquiring an EIDL loan might seem complex, the benefits it presents for businesses in distress are significant. From assisting with fixed debts and payroll to tackling accounts payable and other bills that have become challenging due to the disaster, EIDL loans offer substantial relief. As businesses maneuver through the waves of economic instability, having access to such financial aid can spell the difference between staying afloat or sinking under the weight of disaster-induced economic injury.