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How To Apply Targeted EIDL Advance Grant? | 2022 Updates

Targeted EIDL Advance Grant

Small businesses impacted by COVID-19 may be eligible for an Targeted EIDL Advance grant of up to $10,000, plus an additional $5,000 Targeted EIDL Advance grant. These grants do not have to be repaid. The SBA now encourages all eligible companies to apply.

To be considered for one of these grants, your company must meet the eligibility requirements (see below) and apply for an Economic Injury Disaster Loan (EIDL). However, you do not have to receive or accept the loan to receive the grant.

Apply Targeted EIDL Advance Grant

For background, the CARES Act, passed on March 27, 2020, included a grant (or advance) for those applying for an Targeted EIDL Advance grant of up to $10,000. The SBA later determined these grants would be awarded at $1000 per employee.

Targeted EIDL Advance Grant
Targeted EIDL Advance Grant

In addition, the funds available for grants were exhausted before all eligible companies received them. The Economic Assistance Act, passed on December 27, 2020, included funding for targeted EIDL grants that will allow some of these business owners to receive the full $10,000 small business grant.

The US bailout plan, signed on March 11, 2021, provides an additional $10 billion for these grants, plus an additional $5 billion to provide an additional $5,000 in grants for companies with ten or fewer employees finance that have suffered an economic impact of at least 50%.

Am I Eligible For Targeted EIDL Advance Grant?

To qualify for the full $10,000 Targeted EIDL Advance Grant, a company must:

  • Are in a low-income community, and
  • Have suffered an economic loss of more than 30% and
  • Employ not more than 300 employees

In addition, the company must qualify as a qualifying entity within the meaning of the CARES Law:

  • A small cooperative ESOP parent company with fewer than 500 employees;
  • A person operating as a sole proprietorship, with or without employees, or as an independent contractor; or
  • A private non-profit or small agricultural cooperative.
  • The store must have been in operation by January 31, 2020
  • The company must be directly affected by COVID-19

Economic loss is defined as “the amount by which the affected company’s gross revenues decreased during an 8-week period between March 2, 2021 and December 17, 2022, compared to a comparable 8-week period immediately prior to December 2, 2021. March 2021, or in the course of 2020.” The SBA will develop a formula for seasonal business.

The SBA has released an online tool to help borrowers understand if they are in a low-income area, noting that “the business address must be in a low-income community to qualify. Therefore, the SBA encourages prospective applicants to review the map to see if they meet the eligibility requirement for low-income communities before applying.”

What Are The New $5000 Additional Grants?

The American Rescue Plan includes $5 billion in funding for $5,000 in Supplemental Targeted Advances (grants) for the hardest-hit businesses. The legislation states that these grants are available to covered businesses that:

  • suffered an economic loss of more than 50 percent; and
  • Employ no more than 10 employees

This grant is in addition to the $10,000 targeted EIDL advance. The SBA will reach out to small business owners who have applied for the targeted advance if they are eligible for the additional grant.

How Do I Prove Economic Disaster?

Keeping your corporate tax records organized and up to date is critical to applying for this grant and proving your qualifications.

In its FAQs, the SBA states that “Applicants who meet the low-income community criteria are asked to provide gross monthly earnings for January 2019 through the most recent month to date (all forms of combined monthly earnings received, such as profits or salaries) to confirm the reduction in revenue.

You may also be required to submit an IRS Form 4506-T to allow the SBA to request tax information on behalf of the applicants. The tax verification process and requirements for corporations in US territories may differ.”

The SBA recommends that you complete your tax return as soon as possible. You must submit your company’s monthly gross income for each month from January 2019 to the last month-to-date. This information will be used to determine if your business meets the requirement of a revenue reduction of more than 30 percent during an 8-week period beginning March 2, 2020.

Grant Money From EIDL
Grant Money From EIDL

How Do I Apply For A Targeted EIDL Advance Grant?

If you have previously applied for a Economic Injury Disaster Loan, you will receive an email invitation inviting you to apply for the Target grant and scholarship.

If you have not already applied for EIDL, you can do so at SBA.gov. If your company appears eligible, you will be invited to apply for the Targeted EIDL Advance grant. You do not have to accept (or even be approved for) the EIDL loan to receive the grant if you qualify.

Important! Check your spam folder for emails from the SBA and look out for scams. SBA will contact previous applicants directly via email with instructions on determining eligibility and submitting documentation. The SBA advises:

All communications from SBA will be sent from an official government email with the extension @sba.gov. Please do not email confidential information to addresses that do not end in @sba.gov.

Any previously received targeted EIDL advance grant (not a loan) will be deducted from the $10,000 EIDL grant.

Can I Reapply Or Get A Second EIDL Loan?

The SBA recommends that you do not reapply as this will result in a notice that your application is a duplicate. However, you may be eligible for a larger EIDL loan. The SBA recently increased the amount available for companies that received EIDL loans before April 7, 2021.

Your business may be eligible for an additional loan of up to $500,000 (total) for 24 months of economic damage. You should receive an email from the SBA asking you to apply for the loan increase.

If your company has been rejected for an EIDL loan, you can apply for a reconsideration. Submit your request for reconsideration to pdcrecons@sba.gov. If you prefer to mail it, mail it to: US Small Business Administration Disaster Assistance Processing & Disbursement Center 14925 Kingsport Road FortWorth, Texas 76155. The SBA directs you to provide your application number and any information that might help you to overcome the reason for decline.

Can EIDL Loans Be Forgiven?

If you’re wondering whether EIDL loans are forgivable, the short answer is yes and no. That’s not very helpful, so let’s dive into the longer explanation.

The current EIDL program has two components: loans and grants.

  • EIDL Loans, which can be as high as $2 million, are generally unforgivable and must be repaid. However, there is one exception: If a company obtained an EIDL and applied for a forgivable Paycheck Protection Program (PPP) loan between January 31, 2020 and April 3, 2020, or refinanced its EIDL into a PPP, it may have its EIDL waived will .
  • EIDL Grants are slightly different. They offer companies $1,000 per employee for up to 10 employees, capping their limit at $10,000 and requiring no repayment.

Are Targeted EIDL Advance Grant Taxable?

Good news! The legislation clarifies that EIDL grants are not taxable at the federal level, that companies receiving them are not denied a tax deduction for qualifying expenses paid for with those funds, and that targeted EIDL advance grant are not used by PPP for loan forgiveness purposes subtracted from. Check with your tax professional for state or local tax implications.

Targeted EIDL Advance Grants In COVID-19

The US Small Business Administration (SBA) released updated guidance on loan, Targeted EIDL Advance Grants and appeal requests under the COVID-19 Economic Injury Disaster Loans (EIDL) program.

While the previously established December 31 deadline remains in effect, the SBA strongly recommends that companies seeking a Supplemental Targeted Advance submit their application no later than December 10. The Agency cannot process Supplemental Targeted Advance applications after December 31. This means that applications received close to this date may not complete the review process in time.

In contrast, EIDL and Targeted EIDL Advance grant applications received by December 31 will continue to be processed beyond that date until all funds are exhausted.

EIDL Grants
EIDL Grants

The SBA said it will accept and review requests for reconsideration and appeals received on or before December 31, provided that the reconsideration or appeal is filed within six months from the date of reconsideration denial and 30 days from the date of refusal to reconsider appointments – if funding remains.

The COVID-19 EIDL programs are designed to provide access to finance for small businesses that have been economically hurt during the COVID-19 pandemic. Funding comes in three forms:

  • COVID-19 EIDL loans have 30-year terms with fixed interest rates of 3.75% for small businesses, including sole proprietors and independent contractors, and 2.75% for nonprofits. Loan proceeds can be used for normal operating expenses and working capital, including payroll, equipment purchases and debt service. Loan payments are deferred for the first two years, but interest accrues. Interest and principal are then paid over the last 28 years of the loan.
  • A targeted EIDL advance grants of up to $10,000 is available to businesses that are located in low-income communities, have 300 employees or fewer, and have experienced a revenue loss of more than 30% due to COVID-19.
  • An additional targeted advance is available to recipients of targeted EIDL advance grants who have 10 or fewer employees and have experienced a 50% or greater drop in sales due to COVID-19. The advance payment cap is $5,000, which means companies face a total cap of $15,000 if they receive both types of advance payment grants. Both advances do not have to be repaid.

The guidance issued by the SBA on Friday comes just over two months after the agency announced major changes to the EIDL grant program to make the money more accessible to more companies.

The most significant change was the increase in the EIDL loan limit from $500,000 to $2 million.

Conclusion

Relief is available in the form of government-backed loans and grants for small businesses that have suffered the financial strains of the COVID-19 pandemic.

And for those who have not yet received their full share of the pardon, the Targeted EIDL Advance grant or Supplemental EIDL Advance can help them get the financial assistance they still need.

If you’re a small business owner looking for a loan that works for you, you can apply for a small business grant online with Lantern by SoFi. By filling out a simple form, comparing financing options from a network of lenders, and getting the capital you need in just 24 hours, you can get back in business.