UPDATE 01/14/2021

New PPP and EIDL available – Click Here for more!

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UPDATE July 11
The SBA reported that they ran out of funds for the $1,000 advance. You can still apply for the loan, but currently cannot request the $1,000 advance. The check-box to request the $1,000 advance has been removed from the loan application. You can still apply for the loan without the $1,000 advance.

I will post an update if anything changes and if they allocate more funds for the advance.

Part of the message from the SBA
Having allocated the full $20 billion that was appropriated by Congress, SBA will discontinue making EIDL Advances to new applicants. By law, the SBA is not permitted to issue new EIDL Advances once all program funding has been obligated. 
EIDL loan applications will still be processed even though the Advance is no longer available.

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Reader Question: I am self employed and now on Unemployment. Can I get the $1,000 from EIDL while still on Unemployment?

Yes, you should be able to get $1000 from the EIDL at the same time as receiving unemployment – I don’t see anything that says otherwise. If you are eligible and didn’t apply yet, act fast and apply, before the money runs out.

EIDL – $1,000

The CARES Act has personal aspects, like unemployment and stimulus payments and also ‘business’ help.

The EIDL (Economic Injury Disaster Loan), which reopened for applications on June 15th, helps people whose business suffered financial hardship during Covid-19. It’s run by the United States SBA (Small Business Administration) and includes up to $10,000 in grants for small businesses.

If you have a small business that suffered hardship, you are eligible for $1,000 per employee. So a self-employed person gets $1,000. A business with ten or more employees gets $10,000.

Are you eligible?
If you are self-employed, then you are considered a “small business”. If you work for yourself (e.g. tutoring or selling online) or if you work for a company that pays you via a 1099, you are self-employed. If you run a actual small business or non-profit, you are also eligible. As long as you were “in business” before January 31 2020.

EIDL: Loan or a grant?
There are two parts to the EIDL: A $1,000 grant called an “advance” and a loan request.

If you are deemed eligible, the $1,000 will be deposited into your bank account and DOES NOT need to be repaid.

Separately, you may also be offered a loan, which you can either accept or decline. They will email you their decision and for how much of a loan you are approved. If you accept the loan, you pay nothing for the first 12 months (interest deferred), then 3.75% interest (2.75% for non-profits). Whether or not you accept the loan, the $1,000 does not need to be repaid.

Amount of Income
I didn’t see any specific income requirements in order to be eligible for the grant, just that the business suffered financial hardships. So, put in whatever your gross revenue was from Jan 2019 through Jan-2020. Worst case scenario you get declined. 

The calculation for the loan (based on what I read) is: “Gross Revenues” – “Cost of Goods Sold” divided by 2 (and also minus the $1,000 they already sent you as a grant). So if your total revenue was $50,000 and your COGS was $10,000, then you would get up to a $19,000 loan ($40,000/2 – $1,000 from the grant).

Remember that the application is asking for your “gross revenue”, not your profits. So if you received $10,000 and had $10,000 in expenses (so effectively your small business made $0), your “gross revenue” would still be $10,000. The “Costs of goods sold” is only if you are selling “goods”, not for regular business expenses.

What can this $1000 EIDL grant be used for?
It can be used for almost anything that will help your business recover from Covid-19. See this PDF for more information.

After you Apply:

• After you submit the application, you will see a confirmation page but no email confirmation, so save your confirmation number for your records.
• If your application is approved, $1,000 should be deposited into your account within 3 days (again, don’t expect any notification about this $1,000).
• Separately, the SBA will send an email regarding the loan: You may be told that you were declined for a loan or asked to open a portal etc to apply for the laon. If you just want the $1,000 grant and not the loan, then ignore the emails.
• If you weren’t approved for the loan or for the $1,000, the email will tell you why.

PPP

There is a completely separate grant, also run by the SBA: PPP. This is a very large forgivable loan. Many businesses and self-employed people took advantage of the PPP.

An issue related to unemployment is that a self-employed person cannot be on unemployment and get PPP at the same time, being that PPP is meant to be used, in large part, for payroll, though technically, someone could be on unemployment, then go off unemployment and get paid via the PPP funds.

In any event, the deadline for the PPP is June 30th, so unless you already got it, there is not much time left… UPDATE July 6: The PPP was extended until August 8th 2020!

SBA Links
– SBA’s Coronavirus Relief Options
– PDF from the SBA
– FAQ from the SBA

Other Links
– Helpful FAQ – Reddit
– Application guidance – Gusto.com

Disclaimer: The above information is not financial or legal advice. You are responsible for your own due diligence before making any decision.