EIDL Emergency Grants Program Excluding Funding

An emergency grants program put in place to help small businesses overcome the economic impact of the coronavirus pandemic has been put in place. The Small Business Administration (SBA) recently announced that it will no longer provide Economic Disaster Loan Advances (EIDLs) because the program has reached the $ 20 billion funding limit set by Congress. The SBA says it has awarded emergency grants to nearly 6 million businesses.

Today, the SBA will stop processing Economic Disaster Loan Advance (EIDL) requests since program funds have been fully allocated. By law, the SBA is not allowed to issue new EIDL advances once all program funding has been committed.

– SBA (@SBAgov) July 11, 2020

The EIDL Advance program, created under the $ 2.2 trillion CARES Act, offered grants of $ 1,000 per employee, up to a maximum of $ 10,000. Although the advances are no longer given, small businesses can still apply for a low interest loan under the disaster relief program. Typically, the EIDL offered a maximum of $ 2 million for small businesses, but the SBA later lowered the cap to $ 150,000 due to high demand. EIDL is a long-term SBA program, where small businesses affected by disasters can receive low-interest loans directly from the government. Previously, it had been used to provide assistance after natural disasters like hurricanes and tornadoes, but the government extended it to cover economic suffering caused by the pandemic as well.

The end of the EIDL Advance emergency grant program comes as many companies have used their other coronavirus relief, including the $ 669 billion Paycheck Protection Program (PPP) and some states, like california, are reimposing societal shutdowns due to soaring coronavirus infection rates. A Goldman Sachs survey released on Tuesday, July 14, revealed that 84% of small business owners who received P3 money will run out of funds by the first week of August. Only 16% of companies surveyed said they would be able to continue paying their employees beyond July. The Goldman Sachs survey also found that 63% of small businesses report less than three-quarters of their pre-COVID-19 revenue came back. And, only 37% of those polled believe their business can survive another wave of coronavirus that requires more shutdowns.

Overseen by the SBA but facilitated by private banks, the PPP has more than $ 100 billion in forgivable loans intended to offset the wage bill and some other business costs. The deadline to apply for a PPP loan was recently extended until August 8. Currently, small businesses could only apply for the PPP once; however, Congress is considering allowing entrepreneurs to secure a second round of funding through the program. the Priority Paycheck Protection Program Act (P4) would extend the application deadline to at least the end of the year, and businesses with less than 100 employees could apply for a second loan if they have exhausted or are likely to exhaust their first PPP loan or can post at least 50% loss of income due to the pandemic.