IMPORTANT UPDATE (as of September 2021):
On September 9, 2021, President Biden announced changes to the COVID EIDL (Emergency Injury Disaster Loan) program, including an increase of the maximum loan amount to $2 million, a streamlined loan review process, deferred payments for 2 years, and expanded eligible use of loan funds, including paying down higher-interest debt. Read about the new rules here.
SBA is currently accepting new COVID-19 EIDL applications from all qualified small businesses, including agricultural businesses, and private nonprofit organizations. Apply here.
Targeted EIDL advances and Supplemental Targeted EIDL advances are currently only available for qualifying applicants within low-income areas and who meet certain employment thresholds and other requirements. See details here.
Congress approved a new round of funding for 2021, which re-funds the emergency relief package for America’s small businesses.
The 2021 package contains roughly $284 billion to replenish the Paycheck Protection Program (PPP), an additional $20 billion for the EIDL program, in addition to allowing new types of businesses access to these funds.
PLEASE NOTE: AS OF SEPTEMBER 2021 THE EIDL ADVANCE PROGRAM IS CURRENTLY AVAILABLE ONLY FOR LOW-INCOME AREAS. The SBA is focusing first on Targeted EIDL Advances (see below) to people who applied for the EIDL program last year but were underfunded or unable to receive an EIDL grant due to lack of program funding. The EIDL advance program re-opened in February 2021, starting with Targeted EIDL Advances.
To potentially receive a targeted EIDL advance, you must first apply for an EIDL loan. Per the SBA:
Applicants for the COVID-19 Economic Injury Disaster Loan (EIDL) may be eligible to receive up to $15,000 in funding from SBA that does not need to be repaid. These “advances” are similar to a grant, but without the typical requirements that come with a U.S. government grant.
To receive an advance, you must first apply for a COVID-19 Economic Injury Disaster Loan. You do not need to accept the loan or be approved for the loan to receive an advance. Once you apply for the loan, SBA will invite you via email to apply for one of the advance programs if your business is located in a low-income area.
Some background: on Monday, March 30, 2020, the U.S. Small Business Administration launched a disaster loan assistance program that awards $10,000 grants to eligible American small businesses. If your business has been impacted by the novel coronavirus (COVID-19), it’s important to apply for these grants as soon as possible.
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For context, on March 27, 2020, the U.S. Congress passed the CARES Act. Part of this landmark legislation included a $10 billion appropriation for U.S. businesses under the emergency Economic Injury Disaster Loans (EIDL) provision.
This guarantees that eligible businesses in the U.S. will receive $10,000 grants within three days of applying. There are very few strings attached — even if you do not qualify for a larger loan, this $10,000 will be yours to keep so long as you meet basic eligibility requirements.
What’s the difference between an EIDL advance, a “targeted EIDL advance,” and an EIDL loan?
The SBA has offered both loans and “grants” or advances under the EIDL program, including a “targeted EIDL advance” in December, 2020 intended to provide businesses “located in low-income communities with additional funds to ensure small business continuity, adaptation, and resiliency.”
This targeted EIDL Advance applies only to applicable businesses located in low-income communities who already applied for and previously received an EIDL Advance for less than $10,000, or those who applied but received no funds due to lack of available program funding. If you don’t fit into this category, you don’t qualify for a “targeted EIDL advance.” The SBA is currently reaching out to businesses who qualify.
The SBA will first reach out to businesses that already received a partial EIDL Advance (between $1,000-$9,000). Applicants will be contacted directly by the SBA via email in the coming weeks with instructions to determine eligibility and submit documentation.
Applicants may qualify if they are located in a low-income community AND can demonstrate more than 30% reduction in revenue during an 8-week period beginning on March 2, 2020, or later.
Next, the SBA will reach out to those who applied for EIDL assistance on or before December 27, 2020, but did not receive an EIDL Advance due to lack of program funding. These applicants will receive an email from SBA with instructions to determine eligibility and submit documentation. Applicants may qualify for a Targeted EIDL Advance if they meet the above criteria (low-income location and reduction in revenue) AND have 300 or fewer employees. Again, the SBA will reach out to you if you qualify.
An EIDL ADVANCE is not currently available, but we expect the program to be reopened soon, after the SBA completes their assessment of people eligible for “targeted EIDL advances” discussed above. An EIDL Advance is a forgivable advance of up to $10,000 that was originally calculated based on the number of employees indicated on an applicant’s COVID-19 EIDL application: $1,000/employee, up to a maximum of $10,000.
- EIDL Advance does not have to be repaid.
- Recipients did not have to be approved for an EIDL loan to receive the EIDL Advance.
- The amount of the loan Advance was deducted from total EIDL loan eligibility.
- Contrary to how it originally worked, businesses who received an EIDL Advance in addition to the Paycheck Protection Program (PPP) loan will no longer have the amount of the EIDL Advance subtracted from the forgiveness amount of their PPP loan.
The EIDL LOAN is a non-forgivable, low-interest loan available to small business owners and qualified agricultural businesses in all U.S. states and territories impacted by COVID-19. To learn more about non-forgivable SBA EIDL loans, read their FAQ.
It is currently unclear how many new applicants will be accepted for 2021 EIDL advances. However you may apply for an EIDL loan. SBA is currently accepting new COVID-19 EIDL applications from all qualified small businesses, including agricultural businesses, and private nonprofit organizations. Apply here.
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