SBA $15,000 targeted EIDL advance grant: Do you qualify?

Many small businesses impacted by the coronavirus pandemic were able to apply for a Targeted EIDL Advance (grant) of up to $10,000, as well as a Supplemental Targeted Advance of $5000. EIDL grants do not have to be repaid.

The COVID-19 EIDL and grants program is closed to new applications, however, other Disaster Loan programs and grants continue to be available. We discuss those alternatives later in this article.

Please Note: This article focuses on details of the program when it was still open for applications. The EIDL grant program is now closed.

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

By way of background, the CARES Act that was passed March 27, 2020 included a grant (or advance) for those who applied for an EIDL loan, in the amount of up to $10,000. The SBA later determined that those grants would be made in an amount of $1000 per employee. In addition, the funds available for grants were exhausted before all eligible businesses received them. The Economic Aid Act that passed December 27, 2020 included funding for Targeted EIDL grants, which will allow some of those business owners to get the full $10,000 grant.

The American Rescue Plan signed March 11, 2021 included $10 billion in additional funding for these additional grants as well as another $5 billion to fund $5000 supplemental grants for businesses with ten or fewer employees that have suffered an economic impact of at least 50%.

How do businesses qualify for a targeted EIDL grant?

To qualify for the full Targeted $10,000 EIDL grant, a business must: 

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

In addition, the business must qualify as an eligible entity as defined in the CARES Act:  

• A small business, cooperative, ESOP Tribal concern, with fewer than 500 employees* 
• An individual who operates under as a sole proprietorship, with or without employees, or as an independent contractor; or
• A private non-profit or small agricultural cooperative.
• The business must have been in operation by January 31, 2020
• The business must be directly affected by COVID-19

Economic loss is defined as “the amount by which the gross receipts of the covered entity declined during an 8-week period between March 2, 2020, and December 17, 2021, relative to a comparable 8-week period immediately preceding March 2, 2020, or during 2019.”  The SBA will come up with a formula for seasonal businesses. SBA states that potentially eligible applicants “will be asked to provide gross monthly revenue (all forms of combined monthly earnings received, such as profits or salaries) to confirm the 30% reduction.”  

The business address must be located in a low-income community in order to qualify, so SBA encourages potential applicants to check to see if they meet the low-income community eligibility requirement before you apply.

Is the EIDL advance still available?

No the EIDL advance program (grants) and EIDL (loan) programs have both closed to new applicants. 

Much of the information in this article refers to the COVID-19 EIDL program when it was still open for applications. 

At the end of this article, you’ll find information on EIDL and other grants that are still available. 

How do I demonstrate economic loss?

Getting your tax documents organized and up to date will be essential to applying for this grant and demonstrating you qualify. 

In an FAQ document the SBA explains that “applicants who meet the low-income community criteria will be asked to provide gross monthly revenue for January 2019 through the most recent month-to-date period (all forms of combined monthly earnings received, such as profits or salaries) to confirm the reduction in revenue. 

The SBA recommends that you get your tax filing completed as soon as possible because you will be required to provide your business’ monthly gross receipts for each month from January 2019 through the most recent month-to-date period. This information will be used to determine that your business meets the greater than 30 percent reduction in revenue requirement during an 8-week period beginning on March 2, 2020. 

What are the $5000 supplemental advances?

The American Rescue Plan included $5 billion in funding for Supplemental Targeted Advances (grants) to hardest hit businesses. The legislation states these $5000 grants will be available to covered businesses that:

• Suffered an economic loss of greater than 50 percent; and
• Employ not 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 applied for the Targeted Advance if they appear eligible for the supplemental grant. 

Are EIDL grants taxable?

Good news! Legislation clarified that EIDL grants are not taxable at the federal level, that businesses who receive them will not be denied a tax deduction for qualified expenses paid for with those funds, and that EIDL grants will not be deducted from PPP for loan forgiveness purposes. This applies to all EIDL grants, including those already received. Check with your tax advisor about tax implications at the state or local level.

How do I apply for a targeted EIDL grant?

If you previously applied for an Economic Injury Disaster Loan, you will receive an invitation inviting you to apply for the targeted grant.

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

Important! Check your spam folder for email from the SBA and watch out for scams. The SBA is contacting previous applicants directly by email with instructions to determine eligibility and submit documentation. The SBA advises:

All communications from SBA will be sent from an official government email with an @sba.gov ending. Please do not send sensitive information via email to any address that does not end in @sba.gov.

Any EIDL Grant (not loan) previously received will be subtracted from the $10,000 EIDL Grant.

Again, this program is closed to new funding and/or applications.

Will I have to reapply if I got an EIDL grant for less than $10,000?

No. The SBA has or will reach out to you by email and will provide instructions about how to provide the required information to determine eligibility, and how to submit documentation for any additional grant funds.

Can I reapply or get a second EIDL grant or loan?

The SBA recommends you do not apply again as it will result in a notification that your application is a duplicate. However, you may be eligible for a larger EIDL loan. The SBA has recently increased the amount available to businesses that received EIDL loans. Your business may be eligible for an additional loan of up to $2 million (total) for 24 months of economic injury. You should receive an email from the SBA inviting you to apply for the loan increase.

If your business was declined for an EIDL loan you may request reconsideration. Send your reconsideration request to pdcrecons@sba.gov. If you prefer to mail it, send it to: U.S. Small Business Administration Disaster Assistance Processing & Disbursement Center 14925 Kingsport Road FortWorth, Texas 76155. The SBA instructs you to include your application number and any information you may have that will help overcome the reason for decline. 

Note that because this program has closed, COVID-19 Economic Injury Disaster Loan applications and reconsideration requests are no longer available.

What if I never applied for EIDL?

Businesses that never applied for EIDL were invited to apply at SBA.gov. For COVID-19 loans, businesses were eligible to apply through December 31, 2021 as long as funds were available. If it appeared your business also qualified for the Targeted Advance or supplemental advance, the SBA invited you to apply.

Is it possible EIDL loans will be forgiven?

No. EIDL loans (not advances) must be repaid over 30 years. Unlike PPP loans, there is no forgiveness process for these loans.

EIDL Targeted Advances (Grants) do not need to be repaid. 

If a business or individual fraudulently obtained an EIDL loan or grant, they may be required to repay those funds. 

The SBA estimates it disbursed over $200 billion in potentially fraudulent COVID-19 EIDLs, EIDL Targeted Advances, Supplemental Targeted Advances, and PPP loans. 

The Office of the Inspector General (OD) in collaboration with SBA, the U.S. Secret Service, other federal agencies, and financial institutions are pursuing these fraudulent cases and nearly $30 billion in COVID-19 EIDL and PPP funds have been seized or returned to SBA. These efforts are ongoing.

If you have questions about your outstanding EIDL loan, you can email disastercustomerservice@sba.gov.

Can I also apply for a Paycheck Protection Program (PPP) loan?

Many business owners were able to apply for both PPP loans and EIDL loans and/or grants. However, the PPP loan program is also closed. 

What does SBA do when funds are returned to us?

Some business owners who successfully applied were not able to receive the funds in their business bank accounts. When that happened, the SBA said it reached out to the applicant to request any additional information or documentation needed to overcome the reason for the return.

Is there an EIDL replacement loan opportunity from the SBA available?

The Economic Injury Disaster Loan program (EIDL) was available long before the pandemic and it continues today. 

EIDLs are loans made available to businesses that have suffered economic injury due to a natural disaster such as a fire, flood, hurricane, earthquake or drought. 

If your business has been impacted economically by a natural disaster in a federally declared disaster loan, it may be eligible for a physical Disaster Loan and/or an Economic Injury Disaster Loan. SBA Disaster loans offer low interest rates with a built in deferment period. 

There is no ongoing EIDL grant program, however. That was unique to the pandemic. 

Are there other small business grants available?

Lots of private and government organizations offer small business grants. Learn how to get a small business grant here. 

Are other SBA loans available?

The SBA’s popular SBA loan programs include a number of different types of small business loans, including:

• 7(a) loans
• Express loans
• 504 CDC loans
• Export loans
• Microloans

SBA loans offer small business borrowers that qualify attractive terms, including competitive interest rates and repayment terms. There are SBA loans for operating expenses, working capital, real estate and more. While the application process can seem daunting, SBA lenders will help you through it. Loan amounts vary from up to $50,000 for microloans, to $5 million for 7(a) loans. 

Unlike EIDL and other SBA Disaster loans, you do not apply directly to the SBA to get one of these loans. Instead, you apply with participating lenders. 

Learn how SBA loans work here. 

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