EIDL Declined Codes:

Decline Code 31 Economic injury is not substantiated

The sole purpose of an Economic Injury Disaster Loan (EIDL) is to help a small business meet its working capital requirements during the disaster-affected period until normal operations resume. Economic injury is a change in the financial condition of a small business concern that is directly attributable to the effects of the declared disaster. This change in financial condition must result in the business being unable to meet its obligations as they mature or to pay ordinary and necessary operating expenses.

Generally, we measure economic injury by comparing the gross margins generated by the business during the period affected by the disaster to those generated in similar, non-disaster periods. The differences show the disaster's financial impact on the business' operations. Next, we determine the amount of funds the business and its owners need until normal operations resume. Finally, we compare the disaster's impact on operations with the identified financial needs. The smaller of these two amounts is the business' maximum economic injury eligibility. Economic injury disaster loans cannot exceed the financial requirements the business and its owners could have covered had there been no disaster.

Resource: SBA SOP 50 30 8