Economic Injury and Disaster (EIDL)
- Is the Economic Injury Disaster Loan (EIDL) Program the same thing as the Paycheck Protection Program (PPP)?
- Can I still get a PPP First Draw or Second Draw Loan if I already got money from EIDL?
- Do the funds I got from an EIDL impact the forgiveness of my PPP Loan?
- If I'm applying for a Second Draw PPP Loan, do I use any EIDL funds I may have received when evaluating my "gross receipts" to determine eligibility for a second draw loan?
Is the Economic Injury Disaster Loan (EIDL) Program the same thing as the Paycheck Protection Program (PPP)?
No. These are two entirely separate programs. Both are designed to help small businesses recover from damages incurred by the COVID-19 pandemic, but they have different terms and eligibility requirements.
The Paycheck Protection Program (PPP) is currently open and accepting applications (apply here).
The EIDL grant program is currently open only for the Targeted EIDL Advance.
The Targeted EIDL Advance provides businesses located in low-income communities with additional funds to ensure small business continuity, adaptation, and resiliency.
Advance funds of up to $10,000 will be available to applicants located in low-income communities who 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.
Applicants do not need to take any action at this time. SBA will reach out to those who qualify.
SBA will first reach out to EIDL applications that already received a partial EIDL Advance (between $1,000 – $9,000). Applicants will be contacted directly by SBA via email in the coming weeks with instructions to determine eligibility and submit documentation.
Applicants may qualify for the EIDL Advance if they:
- Are located in a low-income community. The definition of a “low-income community” is defined in section 45D(e) of the Internal Revenue Code. Note that the applicant must be located in a low-income community in order to qualify. Additional details on how SBA will identify low-income communities will be available soon on our Coronavirus Relief Options page; AND
- Can demonstrate more than 30% reduction in revenue during an 8-week period beginning on March 2, 2020, or later. If an applicant meets the low-income community criteria, they will be asked to provide gross monthly revenue (all forms of combined monthly earnings received, such as profits or salaries) to confirm the 30% reduction.
Next, 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. Business entities normally eligible for the EIDL program are eligible, including sole proprietors, independent contractors, and private, nonprofit organizations. Agricultural enterprises are not eligible.
All applicants may be asked to provide an IRS Form 4506-T to allow SBA to request tax return information on the applicant’s behalf.
We hope to get more updates regarding the EIDL grant program soon.
Can I still get a PPP First Draw or Second Draw Loan if I already got money from EIDL?
Yes. If you received EIDL funds, you may still apply for a First Draw or Second Draw PPP Loan.
Do the funds I got from an EIDL impact the forgiveness of my PPP Loan?
The Economic Aid Act repealed the CARES Act provision requiring SBA to deduct EIDL Advance Amounts received by borrowers from the forgiveness payment amounts remitted by SBA to the lender. The EIDL Advance Amount received by the borrower will not reduce the amount of forgiveness to which the borrower is entitled and will not be deducted from the forgiveness payment amount that SBA remits to the lender. Any EIDL Advance Amounts previously deducted from a borrower’s forgiveness amount will be remitted to the lender, together with interest to the remittance date.
If I'm applying for a Second Draw PPP Loan, do I use any EIDL funds I may have received when evaluating my "gross receipts" to determine eligibility for a second draw loan?
No. The amount of any forgiven First Draw PPP Loan or any EIDL advance, which are not subject to federal income tax, is not included in the calculation of “gross receipts”.