How To Apply For The EIDL Targeted Advance and Supplemental Targeted Advance SBA Loan

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Overview

During this very difficult time of the coronavirus pandemic, businesses are the most affected. Over a year of lockdown and work at home, this left businesses to suffer financially and emotionally. Some of them were even forced to close along the way of this battle.

On December 21, 2020, the 116th Congress (2019-2020) of the United States passed the H.R.133 – Consolidated Appropriations Act, 2021.  It was signed into law on December 27, 2020. This Act would fund $2.3 trillion in the following year’s U.S. federal government spending. Amid the coronavirus pandemic that hurt the U.S. economy, $900 billion from the $2.3 trillion is specifically allocated to the Pandemic Relief for Individuals and Businesses.

  • The Pandemic Relief for Individuals includes:
    • Stimulus Payments$600 stimulus payment that will be sent out by the United States Treasury to certain qualifying individuals. After massive pressure, then President Donald Trump called on Congress to pass a bill that would increase the stimulus payment from $600 to $2000. A day after the Consolidated Appropriations Act of 2021 was signed into law, congress voted and passed the bill to increase stimulus payment from $600 to $2000.
    • EDD$300 supplemental jobless benefits (“Enhanced UI”) was added to extended unemployment benefits including self-employed and gig-workers affected by the covid-19 pandemic.
    • Rent Assistance$25 billion allocated to the state to offer rental assistance programs and housing stability services (with a priority toward low-income households and households with unemployed individuals).
    • State BenefitsA 15% increase to the Supplemental Nutrition Assistance Program (“SNAP”) benefits.
  • Pandemic Relief for Businesses processed by SBA (Small Business Administration) includes:
    • Paycheck Protection Program (PPP) – PPP is a forgivable loan that helps businesses keep their employees employed during the COVID-19 crisis. SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses.
      • First Draw PPP Loan forgiveness – If you have not received a Paycheck Protection Program (PPP) loan before, First Draw PPP loans may be available to you. This is offered to new borrowers. First Draw PPP loans can be used to help fund payroll costs, including benefits, and may also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.
      • Second Draw PPP loan – If you have previously received a Paycheck Protection Program (PPP) loan, certain businesses are eligible for a Second Draw PPP loan. PPP now allows certain eligible borrowers that previously received a PPP loan to apply for a Second Draw PPP loan with the same general loan terms as their First Draw PPP loan. Second Draw PPP loans can be used to help fund payroll costs, including benefits. Funds can also be used to pay for mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations.
      • President Biden signed into law the extended deadline of PPP Loan application from March 31, 2021 to May 31, 2021. Processing and funding is extended to June 30, 2021.
    • COVID-19 Economic Injury Disaster Loan (EIDL) – This loan provides economic relief to small businesses and nonprofit organizations that are currently experiencing a temporary loss of revenue. EIDL aims to meet the financial obligations and operating expenses that could have been met had the disaster not occurred. In response to COVID-19, small business owners, including agricultural businesses, and nonprofit organizations in all U.S. states, Washington D.C., and territories can apply for the COVID-19 Economic Injury Disaster Loan (EIDL).
      • EIDL Loan – For loans approved starting the week of April 6, 2021: 24-months of economic injury with a maximum loan amount of $500,000.
        • Loan Increase – For loans approved prior to the week of April 6, 2021, a Loan Increase is being offered. Loans approved prior to April 7, 2021, for less than $500,000 are likely eligible for an increase based on new loan maximum amounts announced March 24, 2021. Businesses that received a loan subject to the previous loan limit can submit a request for an increase. SBA is now reaching out directly to loan borrowers via email to provide more details about how businesses can request an increase. Borrowers should expect to receive emails coming from @sba.gov or @updates.sba.gov. If an applicant accepted a loan for less than the full amount originally offered, the applicant will have up to two years after the date of the loan promissory note to request additional funds. Applicants may continue to request additional funds even after the application deadline of December 31, 2021. The funding must be used for working capital and normal operating expenses such as continuation of health care benefits, rent, utilities, fixed debt payments.
        • COLLATERAL is REQUIRED for loans over $25,000. SBA uses a general security agreement (UCC) designating business assets as collateral, such as machinery and equipment, furniture and fixtures, etc.
        • Maturity/Term is payable for 30 years.
        • FORGIVABLE – No. This type of SBA Loan is not forgivable.
  • EIDL Targeted Advance and Supplemental Targeted Advance – SBA Launches EIDL Targeted Advance and Supplemental Targeted Advance for Small Businesses Hardest Hit by COVID-19. The funding for the hardest-hit businesses and private nonprofits, do not need to be repaid. In short, this funding is a grant.

Applicants may be eligible to receive up to $15,000 in funding from SBA that does not need to be repaid. These “advances” are similar to a grant, but without the typical requirements that come with a U.S. government grant.

To receive EIDL Targeted Advance and Supplemental Targeted Advance, you must first apply for a COVID-19 Economic Injury Disaster Loan. You do not need to accept the loan or be approved for the loan to receive an advance. Once you apply for the loan, SBA will invite you via email to apply for one of the advance programs if your business meets the eligibility requirements. Once you apply for the loan, SBA will invite you via email to apply for one of the advance programs if your business is located in a low-income area.

  • The Targeted EIDL Advance provides funds of up to $10,000 to applicants if your business:
    • is located in a low-income community area. To help applicants determine if they are in a low-income community as defined in section 45D(e) of the Internal Revenue Code, a mapping tool is available. The business address must be in a low-income community to qualify so SBA encourages potential applicants to check the map to see if they meet the low-income community eligibility requirement before they apply; and
    • can demonstrate more than 30% reduction in revenue during an eight-week period beginning on March 2, 2020, or later. If an applicant meets the low-income community criteria, they 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; and
    • Have 300 or fewer employees.
    • Business entities that are eligible to apply for this program include sole proprietors, independent contractors, and private, nonprofit organizations. Agricultural enterprises are not eligible. 
  • Supplemental Targeted Advance – The Supplemental Targeted Advance provides a supplemental payment of $5,000 that does not have to be repaid aside from the $10,000. Even if you have previously received the original EIDL Advance in the full amount of $10,000, you may be eligible for the Supplemental Targeted Advance if you meet eligibility criteria. The combined amount of the Supplemental Targeted Advance ($5,000) with any previously received EIDL Advance or Targeted EIDL Advance ($10,000) will not exceed $15,000.

Completing the Targeted EIDL Advance application is a requirement to be considered for the Supplemental Targeted Advance.

Before applying, make sure your small business meets the following eligibility criteria. Your business is eligible if:

  • It is located in a low-income community. Use this mapping tool to see if your business is in a low-income community. If your business address is within the low-income community, SBA encourages you to you apply.
  • Can prove more than a 50% economic loss during an eight-week period beginning on March 2, 2020, or later, compared to the same period of the previous year. Applicants need to provide gross monthly revenue (all forms of combined monthly earnings received, such as profits or salaries) from January 2019 to the current month-to-date; and
  • Has 10 or fewer employees.

If you do believe that your business is eligible to apply for Click Here to apply now! Make it quick. Application may end soon. Good luck on your application. If you still have more questions, come back in our website www.howtoinstruction.com and search for the answer to your question. You can comment below if you don’t find what you’re looking for and we will make it available for you. Thank you and see you soon!

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