Apr 22, 2020

Your EIDL and EEIG Questions, Answered

As the government comes up with more and more ways to help small businesses get the capital they need, all the differences between your options start to blur—especially the Economic Income Disaster Loans (EIDL) and the Emergency Economic Injury Grant (EEIG). Fortunately, we’re here to answer the most frequently asked questions from small business owners like you.

What’s the Difference Between an EIDL and an EEIG?

Unlike other loan options, there’s not a great deal of difference between an EIDL and an EEIG. In fact, you could compare the relationship between these 2 to that of an older sibling asked to take a younger one to hang out with their much-cooler friends.

In this scenario, the Economic Injury Disaster Loan (EIDL) is the older sibling. This traditional SBA loan is specifically reserved for disaster relief, but the requirements got an extension to include economic injury caused by the coronavirus (COVID-19) pandemic. As a result, it carries the majority of the financial weight when it comes to government aid. However, attached at the hip, is the smaller, still-heavily-appreciated Emergency Economic Injury Grant (EEIG).

While the EEIG may be called a grant, it’s really just an advance on your EIDL that the government decided you don’t need to repay. The total advance amount can be up to $10,000 and is supposed to hit your account just a few days after your everything wraps up with your EIDL application. That said, you can only get this tag-along financial boost if you check the box next to the line that says, “I would like to be considered for an advance of up to $10,000.” If you don’t click the box, you won’t get the money. So be careful not to accidentally leave the little sibling behind.

Who Is Eligible?

Thanks to the CARES Act, eligibility for the EIDL and EEIG advance is less strict than other traditional SBA loans. Your US-based business may be eligible if it has fewer than 500 employees, is a 501(c), 501(d), or 501(e) private nonprofit organization, sole proprietorship, or if you’re an independent contractor. You must also be able to prove the coronavirus (COVID-19) pandemic caused your business substantial economic injury.

Other FAQs

The 2 questions answered above are likely the most important, but we’ve gone ahead and included a list of other frequently asked questions. If you have any others, feel free to contact us, and we’ll do our best to answer them for you.

Can You Get an EEIG for Every Business?

As long as each of your businesses would normally qualify for an EIDL, you can get an EEIG. Just make certain each business has a separate EIN or TIN and is not an affiliate of another business that already applied for an EIDL.

What Dates Do You Use to Determine Payroll and Expenses?

You’re supposed to use the 12 months you were in business prior to the loan application. So long as you were in business for all of 2019, you should be good to go. 

What Do You Do If You Filed for an EIDL Before They Offered the EEIG?

Your best bet is to contact the SBA and ensure that the grant is requested as part of your loan application. Any additional information or advice you need from there would likely be best provided by the SBA.

How Long Does the EIDL Grant Take Before Dispersing Funds?

Despite the typical, way-too-long wait of traditional Small Business Administration loans, the SBA is indicating it’ll take between 2–3 weeks after approval, but if you also request the EEIG, some money will likely hit your bank a bit more quickly.

How Can You Use the EIDL and EEIG Funds?

The intended and approved use for the EIDL funds is to cover day-to-day expenses that your business could have handled had the COVID-19 disaster not occurred. Uses might include keeping employees on the payroll, covering costs for sick leave, meeting increased production costs due to supply chain disruptions, or paying other business obligations—including debts, rent, and mortgage payments. You just need to be a little careful to avoid any overlap with Paycheck Protection Program (PPP) loans.

Can You Apply for Both the EIDL and the PPP Loan?

The short answer is yes, but there is a catch. If a business receives a  Paycheck Protection Program (PPP) loan or refinances an EIDL into a PPP loan, any advance amount received under the Emergency Economic Injury Grant (EEIG) we mentioned earlier is subtracted from the amount forgiven in the PPP.  However, a business can NOT use the EIDL for the same purposes as a PPP loan. Don’t double-dip. Just don’t do it.

If your EIDL was already used for payroll costs, your PPP loan must be

used to refinance your EIDL. 

What Are the Links to the EIDL and PPP Loan Applications?

To apply for the EIDL and EEIG, hop on over to the SBA’s website and fill out this application. For the PPP, all you need to do is follow this link straight to the application we have on our website. Just make certain you have all of the needed materials lined up and ready before you start the application.

 

While every effort is made to ensure the accuracy of information when a story is published, the coronavirus pandemic and Paycheck Protection Program (PPP) have caused details to change at a rapid pace. Additional guidance from the government may change or clarify certain aspects of the forgiveness process and could result in changes to the information contained in these pages. For the most up-to-date information, please visit the COVID-19 section of our website. For more information, you can call us at (855) 853-6346. Lendio is not responsible for and provides no warranty as to the accuracy of this content. Lendio does not provide legal, accounting or tax advice. The information and services Lendio provides should not be deemed a substitute for the advice of such professionals who can better address your specific concern and situation.

About the author

Bjolan Holyoak
Bjolan Holyoak
Bjolan Holyoak is a small business finance writer based in Utah. As a copywriter for Lendio, he fuels the American Dream by giving small business owners the information they crave. He believes that with the right panache, financial information can be as much of a "breath of fresh air" as a hike in the Utah mountains.

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