Businesses affected by the COVID-19 pandemic now have another funding option through the Small Business Administration.The organization is accepting applications for an Economic Injury Disaster Loan (EIDL) advance of up to $10,000. The SBA describes it as a grant, which doesn’t have to be repaid.That money, the SBA says, provides “emergency economic relief” for businesses experiencing ongoing difficulties due to pandemic-related shutdowns or restrictions.An advance, which is calculated at roughly $1,000 per employee, can be part of a regular SBA disaster loan or be issued separately.The SBA reopened its application portal for the EIDL program and opened the advance segment on June 15.The EIDL program was suspended for small businesses and nonprofit organizations on April 16. However, the EIDL portal opened exclusively for agricultural producers on May 4.All three classifications of organizations are eligible to apply for EIDL funding with the program’s relaunch.Applications (including those previously filed) are being processed on a first-come, first-serve basis.EIDL loans are capped at $150,000, down from $2 million when the program launched initially. Wayne Bell, district director for the SBA’s Wichita area office, says the cap was lowered to allow program funding to impact more borrowers.He says the average EIDL loan is $100,000.Businesses can use EIDL funds to cover operating expenses, such as debts, payroll and other miscellaneous bills.EIDL is being revived as the popular Paycheck Protection Program nears its June 30 end date. That program has given small businesses and nonprofit organizations access to a forgivable loan to help them through the COVID-19 pandemic.Sixty percent of a PPP loan must be earmarked for payroll expenses. The Paycheck Protection Program Flexibility Act of 2020 lowered that requirement from 75 percent.However, borrowers can apply for both loan types.Bell says in that instance an EIDL advance will be calculated as part of the PPP loan forgiveness equation.
“Borrowers may obtain an EIDL loan to cover other operating expenses which are not covered by the PPP loan, so the EIDL loan remains a critical resource for impacted businesses,” Bell says.
He says more than 50,000 PPP loans have been approved in Kansas totaling more than $4.9 billion as of June 12. For EIDL in Kansas, 8,653 loans have been approved totaling more than $584,000 as of June 12. Nearly 24,000 EIDL advance grants have been approved totaling $76,408.More information about the SBA’s disaster assistance programs is available online.About us: As the Heartland’s leading employer services company, Syndeo partners with local business owners to help them minimize risk, improve efficiency and maximize profitability allowing them the freedom to focus on growth and fulfilling their mission. Syndeo fulfills its mission by taking on all of the HR responsibilities for our clients’ workforce, including employee relations, benefits, risk management and payroll.