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Difference between revisions of "Emergency Economic Injury Disaster Loans & Emergency Economic Injury Grants"

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Emergency Economic Injury Disaster Loans (EIDL) are available to small businesses and nonprofits that have suffered substantial economic injury. Emergency loans have lower interest rates for loans of as much as $2 million, with principal and interest deferment at the SBA’s discretion. They are available to cover expenses that could have been met had the disaster not occurred, including payroll and other operating expenses. Emergency loans are available for eligible businesses and organizations in operation since Jan. 31, 2020.
  
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Emergency Economic Disaster Loans (Emergency Loans) are available to small businesses and non-profits who have suffered substantial economic injury. Emergency Loans are lower interest rate loans of up to $2 million, with principal and interest deferment at the Administration’s discretion, that are available to pay for expenses that could have been met had the disaster not occurred, including payroll and other operating expenses. Emergency Loans are available for eligible businesses and organizations in operation since January 31, 2010.
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Like the Paycheck Protection Program, navigating this program can be chaotic and contentious. Multiple reports claimed that a lack of funds made the $2 million figure elusive for most businesses. The SBA was overwhelmed, and businesses couldn't get the assistance they needed even to apply. Introduction of the much larger PPP after the EIDL added complexity to chaos, and greater demand for limited resources. A complete description of this program is beyond the scope of this guide –– businesses seeking this relief must consult with a financial professional and be proactive to have much chance of short-term success.
  
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The following business and organizations are eligible for and Emergency Loan:
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Some basics: entities eligible for an emergency loan are:
  
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* Businesses and organizations with fewer than 500 employees.
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<ul>
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* Sole proprietorships, with or without employees.
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<li>businesses and organizations with fewer than 500 employees</li>
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* Independent contractors.
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<li>sole proprietorships, with or without employees</li>
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* Cooperatives and employee owned businesses
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<li>independent contractors</li>
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* Tribal small businesses.
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<li>cooperatives and employee-owned businesses</li>
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* Most private non-profits of any size.
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<li>tribal small businesses</li>
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<li>most private nonprofits of any size</li>
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</ul>
  
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Emergency Economic Injury Grants (Emergency Grants) are available to those businesses and organizations eligible for Emergency Loans and who have been in operation since January 31, 2020. Even if applicants are later not approved for the Emergency Loan they will not be required to repay any Emergency Grant advance payment.  
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Emergency Economic Injury Grants (emergency grants) are available to businesses and organizations eligible for emergency loans and who have been in operation since Jan. 31, 2020. Even if applicants are not approved for an emergency loan later, they will not be required to repay any emergency grant advance payment.  
  
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The grant must be used as follows:
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The grant must be used to:
  
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* Providing paid sick leave to employees unable to work for COVID-19
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<ul>
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* Maintaining payroll to retain employment during business interruption
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<li>Provide paid sick leave to employees unable to work for reasons related to COVID-19.</li>
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* Meeting increased costs to obtain materials unavailable due to interruption in supply chains
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<li>Maintain payroll to retain employees during business interruption.</li>
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* Paying rent or mortgage
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<li>Meet increased costs to obtain materials unavailable due to interruption in supply chains.</li>
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* Repaying obligations that cannot be met due to revenue loss.
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<li>Make rent or mortgage payments.</li>
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<li>Repay obligations that cannot be met due to revenue loss.</li>
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</ul>
  
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If a company accepts certain emergency direct lending relief under CARES, the company must agree to certain limitations on the compensation (including salary, bonuses, equity, and other financial benefits) paid to its officers and employees that remain in effect until one year after the loan or loan guarantee ceases.
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If a company accepts certain emergency direct lending relief under CARES, it must agree to certain limitations on the compensation paid to its officers and employees (including salary, bonuses, equity and other financial benefits). The limitation will remain in effect until one year after the loan or loan guarantee ceases.
  
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Emergency Loans and Emergency Grants are available to businesses who have applied for or received PPP loans. If a PPP loan is received or an Emergency Loan is refinanced into a PPP loan, any advance amount received under the Emergency Grant would be subtracted from the amount forgiven in the PPP.  
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Emergency loans and grants are available to businesses that have applied for or received PPP loans. If a such a loan is received or an emergency loan is refinanced into a PPP loan, any advance emergency grant funds would be deducted from the amount forgiven in the PPP.  
  
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Businesses cannot use the Emergency Loan for the same purpose as the PPP loan.
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Businesses may not use an emergency loan for the same purpose as the PPP loan.
  
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Businesses can apply for the Emergency Loan at https://www.sba.gov/local-assistance/find/.
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Businesses can apply for the emergency loan at https://www.sba.gov/local-assistance/find/.
  
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==See Also==
  
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==SEE ALSO==
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*[[Federal Action Including the Coronavirus Aid, Relief, and Economic Security Act]]
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*[[Navigating_COVID-19:_A_Guide_For_California_Employers|Other sections in this book]]
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* [[Emergency Paid Sick Leave Act]]
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* [[Emergency Family and Medical Leave Expansion Act]]
  
 
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Latest revision as of 21:32, 15 April 2022

< Previous Table of Contents Next >


Emergency Economic Injury Disaster Loans (EIDL) are available to small businesses and nonprofits that have suffered substantial economic injury. Emergency loans have lower interest rates for loans of as much as $2 million, with principal and interest deferment at the SBA’s discretion. They are available to cover expenses that could have been met had the disaster not occurred, including payroll and other operating expenses. Emergency loans are available for eligible businesses and organizations in operation since Jan. 31, 2020.

Like the Paycheck Protection Program, navigating this program can be chaotic and contentious. Multiple reports claimed that a lack of funds made the $2 million figure elusive for most businesses. The SBA was overwhelmed, and businesses couldn't get the assistance they needed even to apply. Introduction of the much larger PPP after the EIDL added complexity to chaos, and greater demand for limited resources. A complete description of this program is beyond the scope of this guide –– businesses seeking this relief must consult with a financial professional and be proactive to have much chance of short-term success.

Some basics: entities eligible for an emergency loan are:

  • businesses and organizations with fewer than 500 employees
  • sole proprietorships, with or without employees
  • independent contractors
  • cooperatives and employee-owned businesses
  • tribal small businesses
  • most private nonprofits of any size

Emergency Economic Injury Grants (emergency grants) are available to businesses and organizations eligible for emergency loans and who have been in operation since Jan. 31, 2020. Even if applicants are not approved for an emergency loan later, they will not be required to repay any emergency grant advance payment.

The grant must be used to:

  • Provide paid sick leave to employees unable to work for reasons related to COVID-19.
  • Maintain payroll to retain employees during business interruption.
  • Meet increased costs to obtain materials unavailable due to interruption in supply chains.
  • Make rent or mortgage payments.
  • Repay obligations that cannot be met due to revenue loss.

If a company accepts certain emergency direct lending relief under CARES, it must agree to certain limitations on the compensation paid to its officers and employees (including salary, bonuses, equity and other financial benefits). The limitation will remain in effect until one year after the loan or loan guarantee ceases.

Emergency loans and grants are available to businesses that have applied for or received PPP loans. If a such a loan is received or an emergency loan is refinanced into a PPP loan, any advance emergency grant funds would be deducted from the amount forgiven in the PPP.

Businesses may not use an emergency loan for the same purpose as the PPP loan.

Businesses can apply for the emergency loan at https://www.sba.gov/local-assistance/find/.

See Also


< Paycheck Protection Program Table of Contents California Resources — Unemployment and Disability Insurance, Paid Family Leave, Paid Sick Leave >
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