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.

When to Apply: Authorized through December 31, 2021, but applications close when funds run out – so if eligible, apply fast. SBA hopes to be accepting applications on or around January 17, 2021.

How to Apply: We expect the SBA application portal to be ready by January 17, 2021. Small businesses should monitor the SBA website in the next week for more information.

Additional Details:

• EIDL advance grants are not counted as gross income for tax purposes.
• Once you apply, the SBA is required to make a determination on application approval within 21 days.
• The EID loan (EIDL) program (30-year term loan with a 3.75% interest rate, 2.75% for non-profits) was unchanged by the recent legislation and is still open through December 31, 2021. See this  tip sheet created by NFIB for more information on the EIDL and apply via SBA here.

The new round of the Paycheck Protection Program (PPP) loans opens this week. Below is an overview of what we know now, we will share updates as we receive them.

At the high level, there is funding for three categories of PPP loans in this legislation:

1. First time PPP loans for businesses who qualified under the CARES Act but did not get a loan (“first draw” PPP loans);
2. Second draw PPP loans for businesses that obtained a PPP loan but need additional funding; and
3. Additional funding for businesses that returned their first PPP loan or did not get the full amount for which they qualified.
   

The PPP loan can be fully forgiven and is non-taxable. For all types of PPP loans, no collateral or personal guarantee is required. For these new loans, any amount not forgiven becomes a loan at 1% for five years.

Eligibility for a "Second Draw" This program is for small businesses, non-profits, sole proprietors, and independent contractors who have exhausted their initial PPP loan. The program will make new loans through March 31, 2021 or until the new funding is exhausted. Eligibility includes:

• Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
• Has no more than 300 employees; and
• Can demonstrate at least a 25% reduction in gross receipts in the first, second, or third quarter of 2020 relative to the same 2019 quarter.

"Second Draw" Key PPP Updates

• PPP borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs;
• PPP loans will cover additional expenses, including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
• The Program’s eligibility is expanded to include 501(c)(6)s, housing cooperatives, direct marketing organizations, among other types of organizations;
• The PPP provides greater flexibility for seasonal employees;
• Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount; and
• Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan.

How to Apply:

• If you have an account at a community bank, ask if they will be taking applications for PPP loans during this round. If so, you should be able to start the application process as soon as Wednesday, January 13. 
• If you do not have an account at a community lender and want to take apply for PPP Entrepreneur Fund can help! Please complete the COVID-19 Support Inquiry Form and our staff will connect with you on next steps. 

Planning to borrow through the PPP forgivable loan program for the FIRST TIME?

The SBA is giving priority to first time borrowers who apply through community lending institutions, rather than the big banks. PPP applications through the large financial institutions will begin at a later date.

• Prepare your 2019 or 2020 payroll summary reports (if you have employees). If you do not have employees, use your 2019 Tax Return 1040 Schedule C.
• If you have an account at a community bank, ask if they will be taking applications for PPP loans during this round. If so, you should be able to start the application process on January 11. 
• If you do not have an account at a community lender and want to take apply for PPP the Entrepreneur Fund can help! Please complete the COVID-19 Support Inquiry Form and our staff will connect with you on next steps.