EIDL Advance Updates – What Small Businesses Need to Know
The EIDL advance is back! This SBA program was established in 2020 to address the economic impact of the COVID pandemic on small businesses. It provided an advance to business owners who applied for an EIDL(Economic Injury Disaster Loan) loan. The $20 billion that backed the first round of EIDL advances was exhausted by the summer of 2020. A second round has been made possible by the stimulus package passed December 21, 2020. An additional $20 billion was earmarked to re-open the program, however, there are some new eligibility requirements.
EIDL Advance Updates
The second round of EIDL advances is referred to as targeted EIDL advances. The biggest change to the program is that to be eligible, a business must be located in a low-income community. This leaves many business owners wondering if they qualify. Is your community considered your town, municipality, or county?
Don’t panic. To help you determine if your business is located in a low-income community a mapping tool is available at https://sbaeidl.policymap.com/app. The business address must be located in a low-income community in order to qualify. Potential applicants are encouraged to check the map to see if they meet the low-income community eligibility requirement.
According to the SBA, the targeted EIDL advance will be available to applicants located in low-income communities who previously received an EIDL advance of less than $10,000, or those who applied but received no funds due to lack of available program funding. The SBA is going to reach out to businesses that fall into these categories via email. All SBA communications will be sent from an official government email with an @sba.gov ending. Do not respond to or send sensitive information to an email address that does not end in @sba.gov.
Additional Eligibility Requirements
In addition to the above requirement, applicants must demonstrate more than a 30% reduction in revenue during an 8-week period beginning on March 2, 2020, or later. If the low-income community criteria is met, applicants will be asked to provide gross monthly revenue (all forms of combined monthly earnings received, such as profits or salaries) to confirm the 30% reduction.
If both the low-income community and revenue reductions are met, there is still one more hurdle to qualify for the targeted EIDL advance. Your business must have 300 or fewer employees. Eligible businesses include sole proprietors, independent contractors, and private, nonprofit organizations. Agricultural enterprises are not eligible.
The Targeted EIDL Advance Application Process
The SBA will start by contacting EIDL applications that already received a partial EIDL Advance (between $1,000 – $9,000). Next, the SBA will contact those who applied for EIDL assistance on or before December 27, 2020 but did not receive an EIDL Advance due to lack of program funding. If your business falls into either of these categories, is located in a low-income community and you believe you will qualify for an EIDL Advance, gather any information necessary to verify that. This way you will be prepared when you receive an email from the SBA.
Need Small Business Funding?
The EIDL advance isn’t your only option. If you’re not eligible for the EIDL advance or the PPP loan, CFG Merchant Solutions may be able to help. Our industry has experienced some constraints as a result of the pandemic but we never stop funding. We continue to offer alternative business funding solutions to qualifying small businesses. We offer a variety of funding options and our experienced team can help you determine which is the best funding solution for your business. Apply or contact us today.