Understanding the COVID-19 EIDL, Targeted EIDL Advance, and EEIG

In response to the unprecedented crisis wrought by the coronavirus pandemic, the federal government has expanded financing support through the COVID-19 Economic Injury Disaster Loans (EIDL) program. In addition to making the EIDL program more accessible to businesses that have suffered economic hardship due to the pandemic, 2 grant programs have been added: the EEIG and the new, targeted EIDL grant.

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Who Can Qualify?

NEW: Targeted EIDL Advance

Loan Advance Uses

General working capital uses

Loan Advance Amount

Up to $10,000

Eligible Businesses

Those in low-income areas that can prove economic loss of 30% or more due to COVID-19

The Targeted EIDL Advance was created under the December 2020 stimulus package to provide support for businesses that have been most heavily impacted by the COVID-19 pandemic. It’s limited to small businesses in low-income areas that have suffered a substantial economic loss due to COVID-19.

The SBA states that eligible entities should be able to maximize the $10,000 loan advance through one of the following methods.

  • An eligible entity may request the full loan advance amount whether or not:
    • Their EIDL application was previously approved
    • They accepted the EIDL
    • They have any other SBA 7(a) loans
  • Eligible entities are able to request Targeted EIDL advance funds if they did not receive grant funds (through the EEIG) previously due to a lack of funding.
  • If an eligible entity previously received an EEIG but did not receive the full $10,000, they are able to request up to the full $10,000.

To be eligible for the new Targeted EIDL Advance, businesses must meet the following criteria:

  • Be located in a low-income community
  • Have suffered an economic loss greater than 30%
  • Have 300 or fewer employees
  • Apply during the covered period (January 31, 2020–December 31, 2021)

Yes, if you applied after January 31, 2020, and meet the other program requirements, you may qualify for the Targeted EIDL Advance.

To qualify for a Targeted EIDL Advance, you must prove an economic loss of 30%+. This is determined by either:

  • Comparing gross receipts from March 2, 2020, through December 31, 2020, and a comparable 8-week period during 2019. You may also use the 8 weeks prior to March 2, 2020. OR
  • If your business is a seasonal business concern (meeting the SBA’s definition of a “small business concern”), then the loss amount is determined by the SBA.

COVID-19 Economic Injury and Disaster Loans (EIDLs)

Loan Use

Working capital to cover day-to-day expenses.

Loan Amount

Up to $500,000

Eligible Businesses

Qualifying small businesses and private nonprofits with fewer than 500 employees

An Economic Injury Disaster Loan (EIDL) is a traditional SBA loan reserved for disaster relief. Previously known for strict requirements and long wait times before receiving funds, much of that has shifted in response to the CARES Act and coronavirus (COVID-19) pandemic.

These loans offer support for small businesses and help them stay operational during disaster-induced hardships. Use these funds to cover necessary day-to-day expenses your business would have successfully covered before coronavirus or other disasters impacted your finances. Examples include:

  • Payroll
  • Accounts payable
  • Providing paid sick leave to employees
  • Matching increased costs to obtain materials
  • Rent or mortgage payments
  • Other obligatory payments that cannot be met due to revenue loss

  • Loan amounts cap at $500,000
  • Interest rates for small businesses are 3.75% and 2.75% for nonprofits
  • Terms up to 30 years

There are other specific requirements for EIDLs. These requirements also apply to businesses that had previously applied for an EIDL due to COVID-19.

Those requirements are that you:

  • Are a US business with fewer than 500 employees
  • Operate as a sole proprietor or an independent contractor during the covered period (January 31, 2020, to December 31, 2020)
  • Are a 501(c), 501(d), or 501(e) private nonprofit
  • Can prove substantial economic injury caused by COVID-19

The SBA requires you to prove your business has suffered as a direct result of coronavirus. If your business was experiencing financial hardship before the pandemic, you likely won’t qualify.

You can apply for an EIDL on the SBA website.

Emergency Economic Injury Grant

Grant Use

There are no limits on the use of an EEIG. But if it is used for payroll and your business is also approved for a PPP loan, the EEIG will be refinanced into the PPP loan.

Grant Amount

Up to $1,000 per employee with a maximum cap of $10,000

Eligible Businesses

Small businesses and private nonprofits with fewer than 500 employees, sole proprietors, and independent contractors

An Emergency Economic Injury Grant (EEIG), Economic Injury Disaster Loan Grant, and EIDL Grant are all the same thing—what the SBA called an “advance” on an Economic Injury Disaster Loan (EIDL). While it may help people to think of it as a grant, it’s really an up-to-$10,000 advance on your loan that the government decided you don’t need to pay back.

EIDL applicants can request to be considered for an EEIG.

In order to apply for EEIGs, you must complete the EIDL application. To be considered for an EEIG, small businesses need to check a box on the final page of the EIDL application.

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