How to Access the SBA’s Emergency EIDL Grant

By Sam Lipscomb, CEPF®

The Coronavirus Aid, Relief, and Economic Security (CARES) Act includes several provisions that offer relief for small businesses that have been affected by the economic stress created by the coronavirus pandemic. This includes an expansion of the Small Business Administration’s (SBA) Economic Injury Disaster Loan (EIDL) Program. Not only are eligibility requirements for this program relaxed, but businesses can also receive up to a $10,000 EIDL forgivable loan advance, which becomes a grant. As of April 16, the Economic Injury Disaster Loan (EIDL) Program is on hold. This applies to both the $10,000 EIDL cash advance grant and EIDL loans in general.

The SBA offers EIDLs to eligible small businesses and organizations that have been affected by natural or economic disasters. Due to the COVID-19 global pandemic, eligibility for EIDLs has been extended to any small business with under 500 employees affected by the outbreak. Other eligible organizations include nonprofits, tribal businesses, cooperatives, employee stock ownership plans (ESOPs), sole proprietors and independent contractors.

An EIDL loan can range up to $2 million in size, with a maturity of up to 30 years. Interest rates for these loans may be as high as 3.75% for companies and 2.75% for nonprofits. In addition, an EIDL’s principal and interest payments may be deferred for up to one year.

While an EIDL business loan can be for as much as $2 million and must be repayed, the EIDL grant is for up to $10,000 and it’s completely forgivable. In fact, the CARES Act allocates $10 billion in federal funds that can be used as quickly available cash advances of as much as $10,000 for applicants.

A business doesn’t actually need to be approved for an EIDL loan to be eligible to receive an EIDL grant. As long as your business is eligible for the program in general, you’ll receive an EIDL grant about three days after you apply for a loan.

EIDL grants do not need to be repaid. As long as a business uses the funds to cover payroll, paid leave for employees, healthcare costs, operating expenses and anything else related to the COVID-19 pandemic, the grant is forgiven and no repayment is required. It is designed to cover expenses that the business could’ve handled had the current situation not occurred.

Having a strong financial plan in place can help to ensure your business remains stable during difficult times. Talk to a financial advisor today.

Every company that’s eligible for the EIDL program is eligible to receive an EIDL grant. Companies and organizations must have been in business by Jan. 31, 2020 in order to be eligible. The list of eligible organizations has been expanded to include businesses with less than 500 employees, nonprofits, tribal businesses, cooperatives, employee stock ownership plans (ESOPs), sole proprietors and independent contractors.

There are a handful of disqualifying factors for the EIDL Program, including if the business:

• Engages in illegal activity
• Is an agricultural enterprise
• Earns revenue from sexual depictions or products
• Earns more than one third of its annual revenue from gambling activities
• Is a government entity
• Is a lobbying organization

Since any company that’s eligible to receive an EIDL loan is eligible for a grant, the process of getting the up to $10,000 advance for your business is relatively straightforward. Simply go to the SBA’s disaster loan assistance page and fill out an application to get started.

Here, you’ll have to note what kind of business or organization you are, while ensuring that you are not disqualified for any of the reasons above. After that, you’ll enter some basic information about your business, such as its address, the names of owners, annual revenue, number of employees and operating expenses.

On the final page of the application, you’ll need to select that you’d like to receive an advance of up to $10,000. You must also enter your bank account information so that the funds can be direct deposited right to your account.

You’ll likely have to let your application process for 18 to 21 days, with another two to five days needed before the SBA will physically disperse the funds into your account. However, your EIDL advance should get to you within about three days of applying.

Accessing the up to $10,000 forgivable EIDL grant for your small business is a relatively easy task. As long as you’re eligible to receive an EIDL loan, you can submit an application and get your advance within just a few days. The application process is straightforward and eligibility requirements are fairly simple. This grant is one of several provisions in the CARES Act that’s designed to help businesses and organizations handle the economic issues caused by the coronavirus outbreak.

• A financial advisor can help you keep your business’ finances in order during tumultuous times. Based on the needs of you, your family and your business, SmartAsset’s free tool can match you with financial advisors in your area in just five minutes. Get started now.
• There are now many resources available for small businesses, including the Paycheck Protection Program (PPP), the Express Bridge Loan Pilot Program and the SBA 7(a) Loan program. Make sure you take advantage of everything that your business might qualify for.

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The post How to Access the SBA’s Emergency EIDL Grant appeared first on SmartAsset Blog.

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