Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our
Editorial Guidelines and
How We Make Money.
May 4, 2023 Update: The COVID-19 EIDL program is not accepting new applications, increasing requests, or reconsidering applications. As of January 1, 2022, SBA stopped accepting applications for new COVID-19 EIDL loans or advances. As of May 6, 2022, SBA was no longer processing COVID-19 EIDL loan increase requests or requests for reconsideration of previously declined loan applications.
During the early months of the COVID-19 pandemic, many businesses suffered due to forced government shutdowns. This, of course, had a ripple effect upon every other sector in the economy, reaching even self-employed and contract workers. To combat this, the federal government passed the CARES Act, which expanded the Economic Injury Disaster Loans (EIDL) program offered by the U.S. Small Business Association (SBA). Part of this legislation made $1,000 grants available to freelancers and gig workers. Unfortunately, they quickly reached their $20 billion funding limit and the $1,000 EIDL grant is no longer available.The good news is that there are other funding options offered by the SBA for independent contractors that have been affected by the pandemic.Read on for the latest on COVID EIDL programs, how to apply, as well as alternative freelance and small business funding options. Is the $1,000 EIDL Grant Still Available?
No, unfortunately the EIDL $1,000 grant was exhausted not long after it was introduced. However, there are two COVID EIDL grant programs (called “advances” by the SBA) that may still be available to independent contractors, sole proprietors, and small businesses affected by the pandemic. To qualify, you have to have been in business since Jan. 31, 2020 or earlier and apply by December 31, 2021.Targeted EIDL Advance
The Targeted EIDL Advance provides a grant of up to $10,000. To qualify, your business must: - Be located in a low-income community
- Be able to demonstrate that it has suffered a 30% or greater reduction in revenue over eight weeks starting March 2, 2020 or later
- Have fewer than 300 employees
Supplemental Targeted Advance
The Supplemental Targeted Advance grant provides up to $5,000. For a business to qualify, it must:- Be located in a low-income community
- Be able to demonstrate that it has suffered a 50% or greater reduction in revenue over eight weeks starting March 2, 2020 or later
- Have fewer than 10 employees
Qualified freelancers and small business owners can receive the $5,000 supplemental payment in addition to the $10,000 received from the Targeted Advance, for a total grant of up to $15,000.Recommended: How Long Does It Take to Get EIDL Funds After Approval? EIDL Loans
The EIDL program existed before the pandemic and was originally designed to help small businesses affected by natural disasters. These loans are still available.In 2020, the program was expanded to include small businesses (with fewer than 500 employees), independent contractors, and sole proprietors who have been negatively impacted by the coronavirus pandemic. Entrepreneurs that qualify for the program can borrow up to $2 million with loan terms of 3.75% fixed interest over 30 years.EIDL Grants vs. EIDL Loans
EIDL grants and EIDL loans have some very distinct differences. Here’s a quick rundown of how these programs compare: | EIDL Grants | EIDL Loans |
| Maximum Amount | $15,000 | $2,000,000 |
| Has to be repaid? | No | Yes |
| Still available? | The application deadline is December 31, 2020 | The deadline for initial application is December 31, 2020, but requests for reconsideration or for additional funds continue into 2022. |
| Interest | NA | 3.75% |
| Loan term | NA | 30 years |
Tips for Applying
To receive an EIDL grant, you must first apply for a COVID-19 EIDL loan. You do not need to accept the loan or be approved for the loan to receive an advance.To request an increase in your EIDL COVID loan, you will also need to go to the online application portal.Once you apply for the loan, the SBA will invite you via email to apply for one of the advance programs if your business is located in a low-income area.Alternatives to the $1,000 EIDL Grant
If you missed the opportunity to apply for any of the EIDL COVID programs for contractors and gig workers, there are other options for getting emergency funding for your business. Here are some you may want to consider.Other SBA Loans and Grants
In addition to the EIDL program, the SBA offers many other loans to small businesses. The 7(a) loan program is a popular one, and there are others you may qualify for. SBA loans tend to have the lowest interest of all your options.In addition, the SBA offers other types of grants to small businesses that do not have to be repaid.National Grant
There are many private and non-private organizations that offer grants to help small businesses recover from Covid-19 economic injuries. The Department of Health and Human Services (HHS.gov) has a page devoted exclusively to COVID-19 grants. Business Line of Credit
Like a business loan, a business line of credit gets you access to funding, but you only pay interest on the amount you use. The SBA offers low-interest lines of credit for small businesses, but you can also look at private lenders. Low Interest Loan
Both the SBA and private lenders offer small business loans. You can apply through a loan brokerage company and, in some cases, receive multiple loan offers with only one application.Business Credit Card
Many business credit cards offer perks to their cardholders, such as points or introductory APR periods. A 0% intro APR card can save you a lot of money as long as you pay off any balance before the introductory period is over. Many business credit cards that offer 0% introductory APR periods, do so for up to 18 months. Recommended: What to Do if You Can’t Afford Your EIDL LoanThe Takeaway
Even though the $1,000 EIDL Grant is no longer available, there are still numerous small business funding options that entrepreneurs and freelance workers can take advantage of. These include other types of grants from the SBA, government grants, and traditional loans.If you’re interested in investigating loan options without making any type of commitment, Lantern by SoFi can help.
Photo credit: iStock/MicroStockHub
LCSB0423059U
About the Author
Lauren Ward
Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.
