On July 11, 2020, the U.S. Small Business Administration announced the conclusion of the Economic Injury Disaster Loan (EIDL) Advance program, which provided U.S. small businesses, non-profits and agricultural businesses a total of $20 billion in emergency funding. The EIDL Advance program provided businesses with $1,000 per employee up to a maximum of $10,000. The SBA will continue to accept applications for EIDL program loans, which offer a 3.75% interest rate for small businesses and 2.75% for not-for-profit organizations, a 30-year maturity, and an automatic deferment of one year before monthly payments begin. Businesses can apply for EIDL loans on the SBA disaster assistance page. [read more]
On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) into law after the legislation was passed with bipartisan support in the U.S. Senate and House of Representatives. The CARES Act includes substantial relief and stimulus benefits for individuals and businesses impacted by the Coronavirus (“COVID-19”) crisis. The following is a summary of the Emergency Economic Injury Grants now available to applicants of SBA Economic Injury Disaster Loans (“EIDLs”):
The CARES Act includes $10 billion in funding for a provision to provide an advance of up to $10,000 to small businesses and nonprofits that apply for EIDLs within three days of applying for the loan. EIDLs are loans of up to $2 million that carry interest rates up to 3.75% for companies and up to 2.75% for non-profits, as well as principal and interest deferment for up to 4 years. The loans may be used to pay for expenses that could have been met had the disaster not occurred, including payroll and other operating expenses.
See Tronconi Segarra & Associates post on applying for SBA Economic Injury Disaster Loans here
The EIDL emergency grant does not need to be repaid, even if the grantee is subsequently denied an EIDL, and may be used to provide paid sick leave to employees, maintaining payroll, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments. The grant is available to small businesses, private nonprofits, sole proprietors and independent contractors, tribal businesses, as well as cooperatives and employee-owned businesses.
Who is eligible for an Emergency Economic Injury Grant?
Those eligible for an EIDL and who have been in operation since January 31, 2020, when the public health crisis was announced.
In advance of disbursing the advance payment, the SBA must verify that the entity is an eligible applicant for an EIDL loan. This approval shall take the form of a certification under penalty of perjury by the applicant that they are eligible.
How long are Emergency Economic Injury Grants available?
January 31, 2020 – December 31, 2020. The grants are backdated to January 31, 2020 to allow those who have already applied for EIDLs to be eligible to also receive a grant.
If I get an EIDL and/or an Emergency Economic Injury Grant, can I get a Paycheck Protection Program (“PPP”) loan?
Whether you’ve already received an EIDL unrelated to COVID-19 or you receive a COVID19-related EIDL and/or Emergency Grant between January 31, 2020 and June 30, 2020, you may also apply for a PPP loan. If you ultimately receive a PPP loan or refinance an EIDL into a PPP loan, any advance amount received under the Emergency Economic Injury Grant Program would be subtracted from the amount forgiven in the PPP. However, you cannot use your EIDL for the same purpose as your PPP loan. For example, if you use your EIDL to cover payroll for certain workers in April, you cannot use PPP for payroll for those same workers in April, although you could use it for payroll in March or for different workers in April.
See Tronconi Segarra & Associates post on applying for PPP loans here
How do I apply for an economic injury disaster loan?
To apply for an EIDL online, please visit https://disasterloan.sba.gov/ela/. Your SBA District Office is an important resource when applying for SBA assistance.
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Please call or email your Tronconi Segarra & Associates advisor or email our Response Team at to discuss the provisions of the EIDL emergency grants or other COVID-19 relief measures being implemented by Federal, State and Local authorities.
