Congress created new provisions under the $900-billion stimulus package (passed December 2020) to better support the businesses most negatively impacted by the COVID-19 pandemic, including a new grant. These funds have more rigorous requirements than other forms of disaster-relief funding like the Paycheck Protection Program (PPP), Economic Injury Disaster Loans (EIDLs), and Emergency Economic Injury Grants (EEIGs).
Here’s everything you need to know about the new EIDL grant, which the SBA refers to as the Targeted EIDL Advance.
The Targeted EIDL Advance is a more robust and targeted version of the EEIG. It’s aimed to help BIPOC-owned businesses and other underserved businesses access vital funding to help weather the coronavirus pandemic. Qualifying businesses can receive a grant of up to $10,000 through the program.
To be eligible for a grant through the Targeted EIDL Advance, a business must meet the following criteria:
Borrowers who meet these qualifications are eligible whether or not:
The Targeted EIDL Advance is designed to help underserved borrowers maximize the $10,000 from the EEIG. Eligible entities can request Targeted EIDL Advance funds if they didn’t receive an EEIG previously due to a lack of funding. If a business did receive an EEIG but they did not receive the full $10,000, the borrower can request the remaining amount through the Targeted EIDL Advance for a combined total of $10,000.
An Economic Injury Disaster Loan (EIDL) awards up to $2 million for qualified borrowers who have suffered a demonstrable negative impact due to a disaster. COVID-19 EIDLs, a subset of the loan program, have a maximum loan size of $500,000, a max interest rate of 3.75%, and a max term of 30 years.
A low-income community is defined (in 26 USC 45D(e)) as a “population census tract,” which generally refers to a neighborhood-sized area where the poverty rate is at least 20% or:
Borrowers must demonstrate an economic loss greater than 30% in order to qualify. Here are the ways that eligible borrowers can prove that loss to the SBA:
Borrowers must apply through the SBA’s website. At the time of publication, they had not yet made that information public. When it is ready, you’ll likely be able to find information on how to apply through the SBA’s umbrella page for everything related to the EIDL program.