US small businesses happen to be a significant casualty from the COVID-19 crisis, however the CARES Act that passed in April 2022 brought struggling businesses a minimum of some extent of relief. Among the small business funding programs funded underneath the CARES umbrella, Economic Injury Disaster Loans (EIDL), included a forgivable cash advance — essentially a grant — as high as $10,000 in the SBA. However, many businesses received much less than the full $10,000, as the money for this program was quickly depleted.
Businesses waited for the better part of annually for the EIDL program to be renewed. Finally, after many frustrating months, on December 27, 2022, the COVID-19 Targeted EIDL Advance was signed into law as part of the Economic Help to Hard-Hit Small Businesses, Non-Profits, and Venues Act. However, the rules are a quite different now. Read on to learn what the Targeted EIDL Advance/Grant is and if you’re qualified.
What Is The Targeted EIDL Advance Grant Program?
SBA EIDL Advance Grants were renewed within the December 27, 2022, coronavirus stimulus bundle. There has been a few changes to how the 2022 EIDL Grants work that are meant to target businesses most abundant in need.
The new Targeted EIDL Grants for 2022 can still be as large as $10,000 but still do not need to become repaid. But this time, they are restricted to previous EIDL Grant applicants that received less than the full $10,000. At this moment, you don't need to apply for this grant; the SBA will reach out to you if you're eligible. Previous EIDL applicants that received an incomplete EIDL Advance between $1,000 and $9,000 qualify, as are those that previously requested an EIDL Grant but didn’t receive one as a result of lack of available funding.
Another change with the new program is the fact that now you can deduct grant investment property on normally deductible expenses from your taxes. Additionally, the grant money you receive through EIDL no more counts against the amount of cash you can have forgiven out of your PPP loan.
Also, this program has become restricted to businesses located within economically distressed areas, and also you need to have suffered at least a 30% loss in income due to COVID throughout an eight-week period beginning on March 2, 2022, or later. On those restrictions below.
How To Entitled to the Targeted EIDL Advance
You may entitled to the Targeted EIDL Advance in 2022 if:
- You previously requested an EIDL Grant but didn’t get the full $10,000. This includes companies that applied but didn’t receive any EIDL Advance/Grant funds and businesses that only received a partial EIDL Advance/Grant between $1,000 and $9,000.
- Your business is located in a low-income community. Low income is understood to be a place with a poverty rate in excess of 20% or an area where the median household income falls below 80% of the state’s median household income. Your area may be the census tract you’re situated in. If you’re situated in a metropolitan area, you can also qualify in case your area includes a median salary of less than 80% of the metro area generally. If you’re an independent contractor, or else you don’t possess a brick-and-mortar business location, you’ll make use of your street address to find out your company location.
- You can demonstrate a 30% loss of income because of the COVID pandemic. To qualify, you’ll compare any eight-week period in 2022 towards the same eight-week period in 2022, starting March 2, 2022, or later. If you started your business in 2022, you are able to compare Q1 2022 income with Q2 or Q3 income, however, you won’t be eligible if you weren’t in business as of January 31, 2022.
How To Apply For A Targeted EIDL Advance
You can’t currently apply — the SBA will contact you should you qualify.
The SBA will initially reach out to previous EIDL Grant applicants that just received a partial EIDL Advance (between $1,000-$9,000). Next, the SBA will get in touch with the ones that applied for an EIDL Grant in 2022 but didn’t receive one as a result of insufficient program funding. Communications from the SBA can come from an official government email by having an @sba.gov ending.
Even though you don’t need to apply, you will still have to submit documentation if the SBA reaches to you. The SBA email includes instructions to find out eligibility (including low-income location and reduction in revenue requirements) and knowledge concerning the documentation you have to submit.
EIDL Advance FAQs
How do i know if I’m in a low-income community?
The definition of a “low-income community” is determined in section 45D(e) from the Internal Revenue Code. Should you aren’t sure if your area qualifies, read New EIDL Grants: How To Tell If Your Business Is In A Low Income Community.
Additional information on the way the SBA will identify low-income communities will also be available soon on www.sba.gov/coronavirusrelief.
How do you demonstrate a loss in revenue?
The SBA will show you precisely what documentation you need. You'll be asked to provide proof of your gross monthly revenue, including all types of combined monthly earnings received, to demonstrate the 30% reduction.
You may also be asked to offer an IRS Form 4506-T to allow the SBA to request your tax return information.
Can I still make an application for an EIDL?
It depends on whether you’re asking about an EIDL Advance/Grant or an EIDL loan. As stated, you cannot directly make an application for the new Targeted EIDL Advance, however the SBA will get in touch with you if you’re eligible. You will not be eligible to receive the forgivable grant if you didn't previously apply for an EIDL Grant in 2022.
However, you can still obtain a low-interest EIDL loan in the SBA; these loans are not forgivable and should be repaid. They are outside of the Targeted EIDL Grant.
More Funding Helpful information on COVID Relief
The new EIDL Grant for 2022 is much more restrictive in what types of businesses will be accepted. This time around, you will have to prove your company suffered a loss, and you’ll only qualify if your clients are inside a low-income area. This program is also closed to first-time applicants. However, even if you don’t entitled to the 2022 EIDL Grant, that doesn’t mean you aren’t entitled to any other government-funded small business COVID relief — like the PPP program, which has been renewed in 2022. Check out these additional funding resources for small business coronavirus relief options:
- PPP Round 2: Main Differences Between your First & Second Round Of PPP Funding
- 7 Lenders That Are Offering Second Round PPP Loans Online
- 5 Banks That Are Currently Accepting Round 2 PPP Loan Applications
- Don’t Want (Or Were Denied) An EIDL Or PPP Loan? Listed here are Your very best Small company Loan Alternatives
