SBA Communicates New Guidance on EIDL Advance

SBA Communicates New Guidance on EIDL Advance

April 16, 2020

The U.S. Small Business Administration (SBA) has recently communicated to applicants of the Economic Injury Disaster Loan (EIDL) regarding the $10,000 forgivable Advance. In their communication, they state that to ensure the greatest number of applicants can receive assistance, the amount of the Advance will be determined by the number of pre-disaster employees and that the Advance will provide $1,000 per employee up to $10,000.

This is new guidance that the SBA had not previously disclosed. They had previously communicated that businesses could receive a $10,000 advance potentially within three days of applying for an EIDL. Unfortunately, this new guidance may limit the Advance amount that some businesses may receive.

The SBA communication also reminds applicants of their potential eligibility for the Paycheck Protection Program. If your business has been negatively impacted by COVID-19, we encourage you to consider reviewing this relief program if you have not already done so. For additional information on COVID-19 financial relief efforts for businesses, please click here.

a
PURPOSE
TERMS
FORGIVABLE
MATURITY
FIRST PAYMENT DUE
Paycheck Protection Program (PPP)
Forgivable if used for payroll (minimum of 75% of the funds received) and the remaining for operating expenses (amount of any EIDL Advance is not forgivable)
Up to $10 million

1% interest rate

YES
2 years
Deferred 6 months
Full EIDL Loan
To meet financial obligations and operating expenses that could have been met had the disaster not occurred (amount of any EIDL Advance is forgiven)
Up to $2 million

3.75% for businesses

2.75% for non-profits

NO – EIDL Loan

Yes – EIDL Advance

30 years
Deferred 1 year
This email communication and any applicable contents pertaining to COVID-19 employer relief provisions is based on our professional judgment given the facts provided to us and the COVID-19 employer relief provisions guidance as of the date of the communication. Subsequent developments changing the facts provided to us, or differences in the final guidance and regulations once they are issued, may affect the advice provided. These effects may be material.