EIDL Grant – Overview
Earlier, small businesses could apply for an EIDL grant of up to US$ 10,000 as an advance on their original EIDL loan.
This was part of the Small Business Administration (SBA) Economic Injury Disaster Loan (EIDL) program. The advance amounts were considered tax-free grants and did not need to be paid back.
However, the EIDL advance program funds have been exhausted and are not available anymore.
The grant was refunded during the second round of stimulus announcements. However, the new grant funds are directed toward low-income communities and come with stricter eligibility criteria.
Eligible recipients for the targeted EIDL advance can expect to be contacted by the SBA and the applicants themselves need not take any action.
What is Targeted EIDL Advance?
EIDL Grant – What is the Targeted EIDL Advance
The new grant, called the ‘Targeted EIDL Advance’ is offered to small businesses operating in low-income communities.
If you are eligible for this advance grant program, you can receive up to US$ 10,000 in advance funds if your business is located in under-served communities.
You can even receive this advanced EIDL fund if you have applied for an EIDL Advance grant earlier but were unsuccessful in securing grants due to a lack of program funding.
This also applies if you have previously received only partial funding under the EIDL funding program.
The IRS defines a low-income community as having the following aspects:
- The poverty rate is more than 20% in the area.
- Median family income in non-metropolitan areas does not exceed 80% of the statewide median family income range.
- The median family income in metropolitan areas is less than 80% of the median metropolitan family income.
According to the SBA, you should be able to provide gross monthly receipts dating from January 2019 to the most recently completed month. For instance, if you are applying in August 2022, you will use the receipt from July 2022.
The SBA uses this detail to decide if your business experienced a 30% or more deduction in revenue during the period in question.
To check if your business is located in a designated low-income community, you can visit the official SBA policy map at this link https://sbaeidl.policymap.com/newmaps#/.
Who is Eligible for the Targeted EIDL Advance Grant?
You may be eligible to receive the Targeted EIDL Advance grant if you fulfill the following criteria:
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- You applied for EIDL assistance on or before 27th December 2020 and either you have received no grant funds or partial grant funds.
- Your business is situated in a designated low-income community, according to the SBA.
- You can show more than a 30% reduction in income during an 8-week period, beginning from 2nd March 2020, or later.
- Your business has at least 300 employees or more.
If you fulfill the above criteria, remember that you don’t have to apply. The SBA will contact all eligible applicants directly. You can expect to receive an email from the SBA in this regard.
How Much Funding Will You Get Under EIDL Grants?
The SBA offers businesses the chance to receive this grant even if they are previous recipients of the program’s funds. In 2020, the EIDL grant was restricted to US$ 1,000 per employee, up to a maximum of US$ 10,000 per business.
In 2021, the eligible businesses that received partial funds amounting to less than US$ 10,000 can apply to receive the remaining amount.
So, if your business received US$ 2,000 under EIDL when you were eligible to receive the full US$ 10,000 amount, you can now apply for the remaining US$ 8,000.
For businesses that did not receive any amount due to a lack of EIDL funding, then you can apply to receive the full US$ 10,000 grant amount.
How to Apply for EIDL Grant?
Earlier, you could simply tick a box in the SBA EIDL loan application as the EIDL grant was not included by default. Hence, you had to officially request it.
However, things changed for the targeted EIDL advance grant as the SBA started to reach out to applicants directly through email.
To find details on how to fill out your SBA EIDL loan application, you can visit the official website at https://bench.co/blog/operations/how-to-apply-sba-disaster-loan/.
When Will You Receive EIDL Grant Funds?
According to the SBA, once you have successfully submitted the required documents, it takes around 21 days for the application to be processed completely. Any decision made by the administration will be communicated directly to your through email.
However, the SBA does not guarantee that your application will be processed in the 21-day period, so you should expect some delay in receiving a response for your application.
Conclusion
The SBA EIDL grant is available to businesses that operate in low-income communities and have applied for this financial assistance on or before 27th December 2020 but have not received the complete amount of US$ 10,000.
This is a genuine financial assistance program and the grant is not considered a loan. Hence, you do not have to worry about repaying the EIDL grant money later on.
References
https://www.sba.gov/funding-programs/
https://www.whitehouse.gov/wp-content/uploads/2022/03/sba_fy2023.pdf
https://content.govdelivery.com/accounts/USSBA/bulletins/3170fcd
https://www.sba.gov/funding-programs/loans/
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