The Emergency Injury Disaster Loan (EIDL) program just got a much-needed boost from the American Rescue Plan Act (ARPA) that was signed into law by President Biden on March 11, 2021. If your business is located in a low-income community and previously applied for an EIDL Advance, read on for how a Targeted EIDL Advance could be a viable resource for your small businesses as it continues to deal with revenue losses as result of the pandemic.
What’s a Targeted EIDL Advance?
The Targeted EIDL Advance program provides additional nontaxable grant funds to qualifying businesses that had previously applied for a regular EIDL Advance. Beginning in late December, the Small Business Administration (SBA) began offering these funds. The recent infusion of ARPA appropriated funds allows the SBA to do the following:
- Continue to offer grants of up to $10,000 to business that applied for but received no grant funds under the original program due to lack of available program funding. To qualify, the business must be located in a low-income community, have 300 or fewer employees, and had a greater than 30% reduction in revenue.
- Continue to make shortfall payments to business that received between $1,000 and $9,000 in grant funds under the original program. The qualifications are the same as above.
- Make additional $5,000 payments to a new tier of hard-hit small businesses. To qualify, the business must be located in a low-income community, have no more than 10 employees, and had a greater than 50% reduction in revenue.
That means you could receive up to $15,000 from the SBA!
How do I know if my business is located in a low-income area?
The SBA has released an online mapping tool to help you understand if your business is located in a low-income community. The SBA recommends that you to check the map before beginning the application process.
How do I get a Targeted EIDL Advance?
There’s no action that you need to take. The SBA will reach out to EIDL applicants using the email provided on the initial application with instructions on eligibility and document submission. All communications from SBA will be sent from an official government email with an @sba.gov ending. The expected timeline for this is as follows:
- First 28 days: Qualifying businesses that received no EIDL Advance.
- Next 14 days: New tier of hard-hit qualifying businesses.
- Next 14 days: Qualifying businesses that did not receive the full EIDL Advance.
Will my Targeted EIDL Advance affect my PPP loan forgiveness?
The ARPA protects EIDL Advance recipients from having their Paycheck Protection Program (PPP) loan forgiveness calculation reduced by the amount of the grant, extending a fix put in place in the December stimulus plan. For instance, if your business received a $100,000 PPP loan as well as a $5,000 EIDL Advance, your PPP loan forgiveness will not be reduced by the $5,000 grant. Since the beginning of the pandemic, the network of accountants and tax professionals at Padgett has helped more 1,500 small businesses secure more than $101 million in EIDL and PPP funding. If you’re interested in learning more about EIDL or any of the economic aid programs included in the most recent round of stimulus, contact our office near you to set up a consultation.