On December 27, 2020 the President signed the stimulus and spending legislation that new EIDL grants, new Paycheck Protection Program loans and other small business relief. Read about the new EIDL grants here and the new PPP loans here.
In August, 2020 the Small Business Administration announced that it would no longer be making EIDL advances to new applicants because the program has allocated the $20 billion authorized by Congress. The Economic Injury Disaster Loan advances are grants that do not have to be repaid. However, small businesses may still apply for a low interest rate loan under EIDL.
By way of background, the CARES Act authorized grants of up to $10,000 to certain small businesses, which the SBA administered as $1000 per employee. As of July 3, 2020, the SBA reported it had disbursed advances to nearly 5 million businesses (4,946,997 to be exact). These grants have been popular with small businesses because they don’t have to be repaid.
However, some issues with the program have been identified:
- Some borrowers were approved for a loan but did not receive a grant, with no explanation as to why not.
- Applicants reported they were turned down for the grant based on credit, although the grant does not have to be repaid.
- Business owners were upset that the SBA arbitrarily limited the amount of the grant to $1000 per employee in contradiction to The CARES Act. (A lawsuit has been filed over the discrepancy.)
- The IRS has not issued guidance about whether these grants are taxable.
- There is a great deal of confusion as to whether (and when) self-employed individuals receiving Pandemic Unemployment must report EIDL grants to their state unemployment agency.
Nevertheless these small grants have helped many small business owners, and many have eagerly anticipated the deposit of the grant into their bank accounts. Thousands have shared their successes in the Facebook group:
Business Loan Insight Financing Hub – PPP, EIDL and More on Facebook
Economic Injury Disaster Loans Still Available
Small business owners and the self-employed who have not applied for an Economic Injury Disaster loan may still want to do so, even though the grant is not available. These loans carry an interest rate of 3.75% (2.75% for non-profits), a 30-year repayment period and a year of payment deferral, though interest accrues. The CARES Act waived the personal guarantee for loans of less than $200,000 and no collateral is required for loans of less than $25,000.
There will be a personal credit check through Experian for all EIDL applicants, and larger loans may also check business credit through Dun & Bradstreet (D&B). There is no minimum credit score required but acceptable credit is required to qualify.
Unlike Paycheck Protection Program loans which require you to apply through a participating lender or agent, the only place to apply for an EIDL is directly with the Small Business Administration (SBA). The application process is fairly straightforward, though a bit confusing because you don’t request a loan amount. Instead, the SBA will calculate it for you based on economic injury.
Although the EIDL loan is currently not forgivable the way a PPP loan may be, a small business may be able to qualify for both EIDL and PPP. The two programs may be complimentary. In particular, EIDL funds may be used for a wide variety of working capital needs while PPP loans must be spent primarily on payroll in order to be fully forgiven.
There is an effort in Congress to lower the interest rate on EIDLs to 1%—the same as the interest rate on PPP loans—and to increase funding for EIDL advances. U.S. Senators Brian Schatz (D-Hawaii) and Catherine Cortez Masto (D-Nev.) have introduced the Small Business Disaster Loan Enhancement Act of 2020, which would also require the SBA to provide the full $10,000 advance and offer a $25,000 grant for some of the hardest hit businesses.
This article was originally written on July 13, 2020 and updated on June 2, 2023.
I was turned down for a grant because of credit and I feel that is wrong. I have not been able to make any money in 2020 because of this pandemic. This has ruined my credit and now I feel like I am being turned down for a loan that will turn into a grant that will not have to be paid back. This is discrimination. This weeds out many people of color. Black people are being turned down because of credit….this sounds a lot like the problems that Black farmers had dealing with the department of Agriculture when they were trying to get federal assistance. This is going to be a problem, much like the Black farmers that couldn’t “Qualify” for federal economic disaster funding. My consulting company made $46,000 dollars in 2019 and because I was not making money my credit took a hit. I could not pay my creditors. I don’t qualify for unemployment. This is not right.
I have written about the fact that I don’t understand why borrowers are turned down for EIDL grants due to credit. My best suggestion is to reach out to your SBA district office to see if they can help, and also to ask your Senators and Congressional Representative in Washington for assistance. (They have staff members whose job it is to help with constituent problems with federal programs.) Also I assume you are looking into PPP?
I’m a white female with a struggling business, same thing happened to me. Didn’t receive it due to credit rating.
Jana – I’d encourage you to apply for reconsideration. The American Rescue Plan included an option for alternative consideration. You may want to contact your local SBA office or an SBA resource partner to find out how to take advantage of this.
I never received the grant
You may be eligible this time around if you qualify. We’ll know more about how to request it when the SBA releases guidance.
If I got a denial letter for the EIDL loan but in the same letter it told me they were able to get a EIDL advance when when should I expect the payment ,
Most applicants are seeing the grant deposited in about two weeks from our understanding.
I still have not received my grant money, what should I do?
Toy – you’ll have to reach out to the SBA directly. For help with the Economic Injury Disaster Loan or grant call 800-659-2955 or email disastercustomerservice@sba.gov.
This loan has been a total nightmare for me. The SBA gives me bad information every single time I call. I applied for the loan to get the grant in early June and was approved. I never received the grant and kept calling. I was told by the SBA I had to accept my loan to receive the grant. 3 months later, still no grant and I find out they had sent the grant in June but there was an error so I updated my bank info and this is where the SBA was negligent. According to this new info, I actually did not need to accept the loan. I keep getting different information on what went wrong each time I call depending on which loan officer I speak to. One officer said the grant didn’t like my bank account and bounced back and was given away over the course of the next month and half despite my persistent emails. The other officer said the grant was sent to wrong account and will need to be fished back and sent to my current one. Either way the SBA basically forced my hand at accepting a loan by giving me false information about receiving a grant. They gave me bad info, meanwhile my find a were sent elsewhere and now I need to pay interest on a loan I can’t afford and don’t need.
Samantha – You may want to share your story with our elected officials in Washington as this is a federal government program.
This exact thing happened to me also. I ended up paying interest on a loan and I did not ever receive the grant money. I called and spoke with level 2 and level 3 support at the SBA office numerous times. I was told to accept the loan and the grant money would later be deposited. In October, I was then told that the grant money had ran out and I would not be getting the grant. They had tried to deposit it into a savings account in March but it kicked back because it was not a checking account. Ultimately, they went on to deposit the loan in the savings account anyways so I am not sure why they could not deposit the grant money there. I wonder if we will be able to get the grant money now that more funding is available or if we will have to apply again.
I was approved but the SBA never responded in anyway to confirm that I was approved .Then they said the tried to deposit the grant money to a bank named after my business then told me they couldn’t deposit the funds because of the bank name like really that just sounds dumb it’s really a shame to be played by your own country
Got 10,000 grant and that has ran out. Can I apply for another loan.
Congress extended funding for EIDL and it is currently accepting applications.
I got a loan but not a grant
. I thought all business were suppose to get a 10,000 grant that you don’t need to pay back.
The way that legislation was written that appeared to be the case. But then the Treasury and SBA decided to allocate $1000 per employee up to $10000.
Can you tell me if there is any current relief for an individual landlord that owns a commercial property and a single Residencial property… Have not collected rent since Feb
Yes you may qualify for the Economic Injury Disaster Loan (EIDL) which is available to landlords.
I was told my sba loan is currently active but i have not received anything what that mean
Stevie – I wish I could tell you. The only place that can help you with your SBA Economic Injury Disaster Loan is the SBA. You’ll have to contact the SBA Disaster Assistance hotline again.
I own a sole proprietorship pool service buisness. As you know everyone was hit hard by the pandemic , some were able to recover and some were not. Our pool buisness was left in shambles .With goals of becoming a prosperous pool service and repair buisness the covid-19 has made that idea far fetched .The SBA has done everything in there power to make sure I was NOT issued the grant or eidl and ppp loans . I heard every excuse under the sun from my economic Injury was not sustainable to insufficient Information and unable to verify my identity .I submitted all required documents as requested as well as my SSN and address , buisness bank account info and even a copy of my mail and still was denied. Even after I submitted reconsideration forms twice . Eventually they just left me hanging postponing the completion and signing of my loan/grants until I received notice stating the funds were either all allocated or the dead line for the grants and loan had expired .I don’t understand what I did wrong or why my business wasn’t worthy enough for “EMERGENCY RELIEF FUNDING” . As if my mother being diagnosed with covid 19 in may, having to care for her and quarantine everyone in the home for weeks wasn’t enough of a economic Injury for them . That ment no one was able to work in the household and I could not continue buisness as planned. I didn’t get any kind of help or guidance from them just denials and non-factual reasoning for the rejection . I am a middle class American citizen that supports the community ,payes taxes does buisness legally and should of been entitled to some kind of relief or anything for that matter.I just think it’s unfair billionaires got this funding with LARGE BUISNESSS OR CORPORATIONS for millions and people like my small buisness , again (SMALL BUISNESS)that’s struggling got denied repetitively . People you need to remember not just black lives matter , ALL LIVES MATTER!
I was in the process of starting and opening my own Therapeutic Animal sanctuary and visiting Pet therapy program when everything came to a halt due to the pandemic..I also lost my job as a bartender of over 20 years . Would this loan be something I could use to get my business up and running ? Thank you in advance -Jennifer
Jennifer – I’m so sorry to hear how COVID-19 derailed your business plans. If you did not have business revenues in 2019 it is unlikely you will qualify for this loan. As for the job as a bartender, unemployment may be the option available to you. You may want to get in touch with your local Small Business Development Center (SBDC) to see what resources are available as you re-evaluate.
I they send through my phone saying my application is still processing in I’m still waiting on mines to they have my account number so they didn’t send me no email at all that I’m going to get it in just be looking out for my email in I been looking at my email everyday nonstop
Hi,I don’t have a business, but I’m in desperate need of help. My Bill’s have skyrocketed and I’m hurting, I have three children to care for, are there any grants for families in need?
Jerry – I’m so sorry to hear that. We write about small business topics here so we aren’t aware of all programs that may be available.
I have tried everything and no luck, no loan
I’m so sorry to hear that. You may want to reach out to your elected officials in Washington to see if they can help with your application as this is a federal program.
If congress passes ppp2.0 will I be able to take advantage of this even though I did receive a ppp and EIDL loan during the first wave of the cares act or will that be reserved for businesses that were not able to grab said programs?
Jesse – until legislation passes we don’t know. You may want to contact your Senators and Representative in DC and let them know about the help your small business needs.
One idea would be to offer the loan at 0% if a business missed out on the grant money.
My application was accepted and I reviewed and answered questions that was asked, after that I was told that my application was being processed for the past 1 week now, yet no response regarding payment or whatsoever, I don’t know why it’s taking so long, does anyone have better reasons why it’s only says application is being processed and yet nothing has been done, not even the payment in my bank account, how long does it take be credited?
A friend who just got the $1,000 for her sole propietorship just got the cedit debited today.
I thought it was a permanent advance.
You mean they took the funds back from her bank account? She should contact the SBA asap to find out why. The only scenario where I can see that happening is if they later determined she didn’t qualify.
My daughter’s bakery applied online for the EIDL grant as soon as it was announced. She never heard anything back. Every time she checked status, she was told it was still being reviewed. To hear that the grant is over is so disheartening. She has nine employees.
Hey I was approved but nothing has came up in my account I really need to get my company back to to running
I’m a sole proprietor with 2 separate gigs. One as a private duty nonmedical need home care RN, the other I rent rooms in my home to college students. I lost all room & board income in March as well as private duty income. I am auto immune and considered extremely high risk regarding COVID19 and my doctors have ordered me to maintain protective isolation until further notice- at the rate things are going itll be a year! I’ve denied ALL ASSISTANCE- DENIED PUA/PEUC UNEMPLOYMENT which I absolutely DO qualify for. ZERO PROPER CORRESPONDENCE HAS EVER BEEN RECEIVED FROM MISSOURI DES EITHER- I WOULDN’T KNOW HAD I NOT CHECKED UNDER THE WEBSITE AND NOTHING WAS FILLED OUT PROPERLY LET ALONE PROCESSED PROPERLY. I CAN’T EVEN SPEAK TO A DAMN PERSON THERE! DENIED EIDL LOAN AND I GUESS I WONT GET THE GRANT EITHER. DENIED FOOD STAMPS CAUSE WE “USED TO MAKE TOO MUCH” AND NOW MAKE $1.20 TOO MUCH TO GET ANY HELP AT ALL!!!! WE’RE HEALTHCARE WORKERS- IM AN RN HUSBAND AN OT, AND NO ONE WILL HELP US.
Electric company shut us off today. Gas tried to on Tuesday but extended to Monday. Any assistance takes over a month- they won’t wait that long. And NONE IS ENOUGH TO COVER OVER 4 MONTHS ARREARS!!!! WE ARE SCREWED! NO ONE CARES ABOUT US- WE THE PEOPLE THAT IS. I BELIEVE I WAS DISCRIMINATED AGAINST BY UNEMPLOYMENT PEOPLE BECAUSE IM IMMUNE COMPROMISED! THEY DO WANT TO PAY SOMEONE THAT CANT GO BACK IN A MONTH OR 2.
Hi I apply for two small business EIDL with Sba they both got preapproved they both checked my credit I receive money from one.the other one I having hear from them in two months?
Thank you for your time
I own multiple small businesses and was told that I could apply for the loan/grant for EACH business. However, after I did that I received an email saying the businesses were duplicates and my applications were withdrawn! What’s my next course of action?
I was not approve for loan due to my credit score but they i will receive advance fund. Its been three days i havent receive any funds in my account. Pls can you tell me what happened?
I’ve applied for a loan .I desperately need the help.It would make life a bit more bearable. Please help me.
I need help I was denied the loan but did not receive the $1000 grant for pself or employees either.need credit repair help also.
Marvin – Unfortunately we have heard that some applicants did not get the loan or the grant. We don’t know why that is; you’ll have to reach out to the SBA Disaster Assistance hotline at 1-800-659-2955. (You can ask to be reconsidered.) Regarding your question about credit repair help, Nav does not provide credit repair services but you can use a free Nav account to check and monitor both personal and business credit. You can sign up for a Nav account at Nav.com.
I applied for the EIDL on July 6th, T.he cut off was July 11th. Weeks later I still haven’t heard anything. Was I too late?
There is additional funding for EIDL so you shouldn’t be too late. I’d recommend you contact the SBA’s Disaster Assistance hotline to find out what’s happened to your application. (And check your email spam folder.)
im independent contractor how much max i can get for EIDL LOAN
The SBA will calculate your loan amount based on economic injury. It’s a complex formula so my best bet is to apply and see how much they approve. You can always request reconsideration if you need more.
Somebody should write about the amount of fradulant claims that the SBA handed out without any review. The amount exceeds $100 million dollars. This has been reported internally, but no action was taken. Hundreds of people claimed the maximum $10,000 and the funds were automatically sent out.
We’ll no doubt hear about investigations of fraudulent loans and grants.
I have applied and have not got any response on anything
Yes they denied me.the same day saying it was my credit
Thank You for all your Help, your Team will be remembered Highly. Expanding would like larger restaurant space, where can I purchase a template for a Projection and Financial Plan. Thank You wonderful team.
Two suggestions: 1. Nav has partnered with a couple of services that can help, including Wise Business Plans and LivePlan. You’ll find more information about both here. We’d also recommend you make an appointment to talk with a Small Business Development Center advisor and/or a SCORE mentor – both offer free help to small business owners. Locate your local offices at SBA.gov/tools.
I was denied based on credit who can I talk to
I’m interested in the small business loan
Hi Tracy – if you’re talking about an EIDL loan, you can apply at SBA.gov. For other types of financing I’d suggest you get a free Nav account so you can learn about your financing options.
This is a nightmare i was turned down because of my personal credit history , nothing is consistent with the sba .
So sorry to hear that Dexter. You can request reconsideration, though I don’t know how quickly they are processing those requests. You may want to reach out to your Senators and Representative in Washington. They have staff who are assigned to help constituents who are having trouble with federal programs like this.