If your business missed applying for PPP loans or didn’t quality, the federal government has approved Economic Injury Disaster Loans (EIDL) for small businesses in all 50 states. This relief is offered via the Small Business Administration (SBA).
Targeted EIDL Advances
As of April 7, 2021, a new round of EIDL Advances, called Targeted EIDL Advances, was launched. It’s important to note that the combined amount of the Targeted EIDL Advance and any previously received Advance will not exceed $10,000.
The Targeted EIDL Advances differ slightly than previous EIDL grants. Businesses are only eligible if they meet ALL the following criteria:
- Located in a low-income community, as defined in section 45D(e) of the Internal Revenue Code. Check the mapping tool to see if you’re in an area that qualifies.
- Suffered economic loss greater than 30 percent, as demonstrated by an 8-week period beginning on March 2, 2020, or later, compared to the previous year. You will be required to provide the total amount of monthly gross receipts from January 2019 to the current month-to-date.
- Must have 300 or fewer employees. Business entities normally eligible for the EIDL program are eligible, including sole proprietors, independent contractors, and private, nonprofit organizations. However, agricultural enterprises, such as farmers and ranchers, are not eligible to receive the Targeted EIDL Advance.
While there isn’t an available application, be on the lookout for an email invite from the SBA to apply, as it’s the ONLY way to apply. Just to be sure, you can search your inbox for this domain now – @sba.gov – to be positive you haven’t received it already.
Businesses that received a previous EIDL Advance less than $10,000 will have first priority to apply for the Targeted EIDL Advance, followed by businesses that applied before December 21 but did not receive because available funding was exhausted. They take several weeks to be sent out fully, so don’t fret if you don’t get it right away.
If you receive an email and qualify, you may be asked to provide an IRS Form 4506-T for tax information purposes.
This program offers:
- Loans of up to $2 million
- Interest rates of 3.75% (2.75% for non-profits)
- Collateral of $25,000 for all loans (might be waived in some cases)
- 30-year repayment terms
- Funds within 14-20 days
- Cash advances of up to $10,000 upon application that DO NOT need to be repaid
PPP vs EIDL Loan
We’ve pulled some of the most important distinctions between PPP and EIDL loan properties for you (but can read them for yourself here):
- While the PPP loan is forgivable, the EIDL loan is not (the $10,000 advance is actually a grant and does NOT require repayment)
- There are fewer restrictions on what you can spend EIDL loans on, making them a perfect avenue to invest in marketing or other business growth efforts
- PPP lenders are regulated lenders like banks, while the SBA handles EIDL loans
- There is a personal guarantee required for EIDL loans exceeding $200,000
- The SBA will place a UCC lien against your assets for collateral
- You can still apply for an EIDL loan even if you haven’t filed your 2019 taxes. However, you will be asked to submit IRS form 4506T, which provides the SBA with access to your previous tax returns
Our priority here at Flexicrew is to keep businesses like yours informed about COVID-19 — to stay up to date on developments.