The U.S. Small Business Administration has a new grant program for small businesses that have lost income due to the coronavirus pandemic.
The grant program is called the Targeted Economic Injury Disaster Loan Advance and offers a business a grant for as much as $10,000. The grant program came about after Congress passed the most recent Economic Aid Act in December, which set aside $900 billion for various stimulus and relief programs. The grant program is somewhat unique in that the SBA will contact those who have previously gotten assistance from the agency. Once that contact has been made, a business owner can apply.
The new program also differs from the previous EIDL Advance grant, in that the amount will not be deducted from a Paycheck Protection Program loan, when the loan-holder goes through the forgiveness process.
In an email sent to the Herald, Eric Giltner, senior area manager for the SBA office in Grand Forks, wrote “many businesses did not realize the EIDL Advance would be deducted for those who applied for a PPP loan, meaning many PPP borrowers would be left with a loan between $1,000 and $10,000 for an approximated 4.5years at 1% interest.”
According to Giltner, many lenders were also not happy with the situation, because they wound up having to service a new group of small loans, a burdensome process. The new Economic Aid Act removes this requirement, and the SBA is reaching out to lenders to reconcile the differences.
The Targeted Advance grant is being targeted at two priority groups. The first group is made up of those who applied and received less than $10,000 prior to the EIDLE Advance funds being exhausted, which happened in the summer of 2020. If a business first received $5,000, for example, it may be eligible for the remaining $5,000. The SBA will contact members of this group by email.
The second priority group is made up of business owners who applied for an EIDL loan after the Advance funds were exhausted, and before the Dec. 27, 2020, deadline. Members of this group must be located in a federally designated low-income community and must show they have seen a greater than 30% reduction in revenue during an eight-week period beginning on March 2, 2020. Members of this group will be contacted in the coming weeks by the SBA.
The SBA is cautioning people in the priority groups to be aware that official email from the agency comes from email addresses that end with @sba.gov. Applicants should not send personal or financial information to address with different endings.
The funds may be used for working capital and operating expenses. While waiting to be contacted, a business owner should make sure they have filed a 2019 tax return and prepare monthly gross receipts for each month from January 2019 through the most recent month-to-date period. More information can be found at the SBA’s website.