UPDATE: As of August 2020, SBA has discontinued the $10,000 grant for Economic Injury Disaster Loans due to funding limitations by Congress. Below is a summary of the original information.
Atlanta, GA – The federal government has unveiled a new streamlined process for Atlanta small businesses, affected by the Coronavirus, to apply for a COVID-19 Economic Injury Disaster Loan (EIDL). These loans offer an advance of up to $10,000 for small business owners, sole proprietors, independent contractors, and the self-employed.
This theoretically includes Fulton County’s gig economy workers, as long as they have been in business since at least Jan. 31, 2020. According to guidance issued by the Massachusetts District Office of the Small Business Administration on April 6th, “EIDL Loan advances will start to be distributed this week. $1000 per employee up to $10,000 max.”
According to the Small Business Administration’s website, “This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application. This loan advance will not have to be repaid.”
The exact provision in the law is Section. 1110. EMERGENCY EIDL GRANTS. This section describes the requirements for receiving the $10,000 Emergency Grant. The first section waives most of the normal requirements including requiring a personal guarantee and the requirement that you be in business for at least 1 year. You still must be in business since at least Jan. 31, 2020.
The qualification process for obtaining these loans has also been streamlined. Section 1110, subsection (d), paragraph 1 indicates that requests may be approved, “based solely on the credit score of the applicant.” It also states that applicants will not be required to submit tax returns to qualify.
According to Section 1110, subsection (e), paragraph (4), the $10,000 Emergency Grant may be used for any of the following approved purposes:
(A) providing paid sick leave to employees unable to work due to the direct effect of the COVID–19;
(B) maintaining payroll to retain employees during business disruptions or substantial slowdowns;
(C) meeting increased costs to obtain materials unavailable from the applicant’s original source due to interrupted supply chains;
(D) making rent or mortgage payments; and
(E) repaying obligations that cannot be met due to revenue losses.
This means that you may use the fund to maintain payroll, buy materials for your business, and pay your rent. It also means that if your business is forced to use the corporate credit card to stay in business, those expenses qualify for forgiveness.
Applying for the EIDL does not exclude your small business from applying for the Paycheck Protection Program (PPP) loan. That program, which offers forgivable loans of up to $10 million requires that you apply through an approved lender.
Be aware, if you accept the $10,000 Emergency Grant through the EIDL, the CARE Act states that the Emergency Grant will count against the forgivable amount of your PPP loan. Applications for the PPP opened on April 3 for small businesses and sole proprietorships and April 10th for independent contractors and the self-employed.
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