SBA reopens EIDL Advance Grant with Strictly Targeted Eligibility
The federal COVID-19 recovery law enacted in December includes more funding for targeted Economic Injury Disaster Loan (EIDL) advance grants. SBA has begun rolling out this new, more targeted advance grant program to businesses that received a first-round advance grant in 2020 that was under the program’s limit of $10,000, and to those who applied but received no funds because the program’s funding was already spent.
Small businesses may be eligible if they are located in low-income communities,* and have experienced a 30% reduction in gross receipts during any 8-week period between March 2, 2020 and December 31, 2021 compared to a comparable 8-week period before March 2 or in 2019. If you meet this description and previously received a EIDL advance grant that is less than $10,000, your business may be eligible receive the difference. Eligible businesses seeking the full $10,000 grant will be approved prior to any new applicants.
What: The EIDL advance grant is a form of small business relief providing $10,000 dollars in grants, i.e., completely free and non-repayable money, to select small businesses. The grant program was part of the initial CARES Act in 2020, but funds were exhausted within weeks. In December, Congress allocated additional funds for the program and established more targeted eligibility criteria.
Who is Eligible:
- Business was in operation prior to January 31, 2020,
- Business has less than 300 employees,
- Business is located in a low-income community,* and
- Business suffered at least a 30% reduction in gross receipts during any 8-week period between March 2, 2020 – December 31, 2021 compared to a comparable 8-week period before March 2 or in 2019.
*What is a low-income community? SBA says additional details on how it will identify low-income communities will be available soon.
When and How to Apply: The program is authorized through December 31, 2021, but will close when its allocated funds run out. SBA’s latest guidance tells small businesses to wait for SBA to contact them if the business is eligible (sba.gov email addresses only); SBA says no proactive outreach by business owners is needed at this time. Small businesses should monitor the SBA website in the coming weeks for more information.
- EIDL advance grants are not counted as gross income for tax purposes.
- Once you apply, the SBA is required to make a determination on application approval within 21 days.
- To keep up with the latest, check out NFIB’s coronavirus resources and join NFIB’s COVID-19 webinar series.
- The EID loan (EIDL) program (30-year term loan with a 3.75% interest rate, 2.75% for non-profits) was unchanged by the recent legislation and is still open through December 31, 2021. See this NFIB-created tip sheet for more information on the EIDL and apply via SBA here.
Updated January 25, 2021