EIDL Grant Update

Last updated: 1-4-21 at 3:30 pm.

If you’re a small business owner in a low-income community you could benefit from the  Economic Injury Disaster Loan (“EIDL”) program with the signing into law of the Consolidated Appropriations Act, 2021 (“CAA”) bill on December 27, 2020. Business owners who missed out on the first round of EIDL advances or who did not qualify for the full $10,000 may now have a second chance at receiving this funding. The bill also repeals the requirement that PPP borrowers deduct the amount of any EIDL advance from their PPP forgiveness amount. The next step is for the SBA to issue guidance and instructions for applying for the new Emergency EIDL grants. In addition, the SBA has clarified that the deadline to apply for a new EIDL loan has been extended to December 31, 2021.

EIDL Grant Details (2021)

• $1,000 per employee, up to $10,000
• NOTE: More information and how to apply will be available January 4-6th, 2021.

Who Qualifies for an EIDL Grant?

• Can you make a “good faith” claim that you experienced an economic injury?
• Did you experience a 30% economic loss in an 8-week period of 2020?
• Do you employ under 300 employees?
• Are you located in a low-income community?

There was quite a buzz in 2020 when the SBA first announced a $10,000 EIDL grant that didn’t need to be paid back, and then it died down when the SBA changed that to $1,000 per employee … and then funds ran out.

The EIDL grant is coming back, and qualifying businesses may indeed get the full $10,000 (minus any grant already received), even if they were turned down previously or were locked out because funds were exhausted.

However, there are stricter qualifications this time around. In addition to the qualifications in the original CARES Act, a business (including sole proprietors and independent contractors) must have 300 or fewer employees, be located in a low-income community, and have suffered an economic loss in an 8-week period greater than 30% because of Covid-19.

If a business requests an EIDL grant, the SBA will have 21 days after receiving the request to verify whether the business is eligible. If eligible, the grant will be provided and if not, the applicant must be told why the SBA did not consider them eligible.

Questions? Contact one of our experts at (888) 388-1040.

We will update this article when more information is available from the SBA.