UPDATE: All available funds for the EIDL Advance program have been allocated, therefore the EIDL Advance Program is NO LONGER AVAILABLE. EIDL loan applications will still be processed even though the Advance is no longer available.
On June 15th, the SBA announced that it was accepting new applications for the Economic Injury Disaster Loan and Advance. This is different from the Paycheck Protection Program. Independent contractors and sole proprietors are eligible to apply, even if you have already received PPP funds.
Now, a few things you need to know. There are two parts to the EIDL program – the Loan and the Advance. The loan is capped at $150,000 per business, and the Advance is capped at $10,000 but calculated on the basis of $1,000 per employee, meaning that as a freelancer, you’re only eligible for $1,000 on the Advance (not the loan.) The Advance won’t need to be repaid, but the loan will be at 3.75% over 30 years with the initial payments starting in one year.
You apply for the loan and the advance at the same time, with the same application. Even if you’re denied the loan or if you decide not to move forward with it, you could still receive the $1,000 Advance / Grant.
Unlike the PPP, you do not need to go through a bank, you can apply directly on the SBA’s website. And unlike the PPP, there are no requirements as to how you use the money – you just need to use the funds for different purposes than what you are using your PPP funds for (if you received any).
A few tips to fill out the form as an independent contractor:
- Use your name in the Business Name field and your personal SSN.
- Make sure you select Sole Proprietorship when asked for the business type.
- On the question of ownership, write your name and 100%.
- When asked about your gross revenue, enter the total amount of money you made in 2019 (before any deductions)
- When asked for the total cost of goods sold, enter the total of your business expenses from 2019 – everything that you spend to provide your services and create your products. We know this can sound counterintuitive – here are some more details on what “costs of goods sold” means if you’re interested
- When asked about the date your business was established, write the date when you started working as a freelancer. If this was after January 31st, 2020 you won’t be eligible for the EIDL.
- Make sure to provide your bank account information to receive your money fast. You can find your account and routing number in your Lili app, under your name in the menu.
The SBA will process the application on a first-come first-serve basis. The additional funding of $60 billion was approved by Congress on April 24th.
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