Colorado SBDC Disaster Relief Efforts Supported By:
Economic Injury Disaster Loan (EIDL)
In response to the Coronavirus (COVID-19) pandemic, small business owners, including agricultural businesses, and nonprofit organizations in all U.S. states, Washington D.C., and territories can apply for an Economic Injury Disaster Loan. The EIDL program is designed to provide economic relief to businesses that are currently experiencing a temporary loss of revenue due to coronavirus (COVID-19).
SBA is currently accepting new Economic Injury Disaster Loan (EIDL) applications from all qualified small businesses, including agricultural businesses, and private nonprofit organizations.
The estimated time for completing the entire application is two hours and ten minutes, although you may not need to complete all parts.
Repeal of EIDL Advance Deduction Requirement for SBA Loan Forgiveness Remittances to PPP Lenders
Section 1110(e)(6) of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
required SBA to deduct the amount of any Economic Injury Disaster Loan (EIDL) Advance
received by a PPP borrower from the PPP forgiveness payment remitted by SBA to the PPP
lender. On October 2, 2020, SBA began remitting forgiveness payments to PPP lenders, with the
required EIDL Advance deductions. On December 27, 2020, the President signed the Economic
Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Economic Aid Act), which
repealed Section 1110(e)(6) of the CARES Act.1
In order to implement the repeal, the Forgiveness Platform has been updated and, effective
immediately, SBA will no longer deduct EIDL Advances from forgiveness payments remitted to
PPP lenders. This change will be applied to SBA forgiveness payments with a status of
“Payment Confirmed” dated December 29, 2020 or later.
Good news! The new federal recovery law includes more funding for Economic Injury Disaster Loan (EIDL) advance grants. SBA has indicated that the EIDL grant application will be available by January 17, 2021.
EIDL grants will be given to small businesses located in low-income communities,* who have experienced a 30% reduction in gross receipts during any 8-week period between March 2, 2020 and December 31, 2021 compared to a comparable 8-week period before March 2 or in 2019. Also, if you meet this description and previously received a EIDL grant that is less than $10,000 you can reapply to receive the difference (those reapplying for the full grant will receive approval priority over new applicants).
What: The EIDL grant is a form of small business relief providing $10,000 dollars in grants, i.e., completely free and non-repayable money, to select small businesses. The grant program was part of the initial CARES Act in 2020, but funds were exhausted within months. In December, Congress allocated additional funds for the program.
Who is Eligible:
- Business was in operation prior to January 31, 2020,
- Business has less than 300 employees,
- Business is located in a low-income community,* and
- Business suffered at least a 30% reduction in gross receipts during any 8-week period between March 2, 2020 – December 31, 2021 compared to a comparable 8-week period before March 2 or in 2019.
* What is a low-income community? This article explains how to determine if you live in a low-income community, and the federal government offers this map where you can type in your address for determination.
SBDC is here to help you, whether you need help deciding if additional funding is right for your business, help applying, or general business consulting. Sign up for free, one-on-one confidential consulting today.