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Are EIDL Grants Still Available in 2022?

Are EIDL Grants Still Available in 2022?
Susan Guillory
Susan GuilloryUpdated August 31, 2022
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If you’ve heard about the COVID-19 Economic Injury Disaster Loan (EIDL), you might be interested in applying. And, if you’re familiar with EIDL grants, which don’t have to be repaid, that may sound even more appealing.However, for some small businesses, options for getting these Small Business Association (SBA) loans and grants end in 2021. Read on to learn the latest about EIDL programs, how these loans and grants work, as well as other ways to get financial help for your small business.Recommended: How Long Does It Take to Get EIDL Funds After Approval? 

What Are EIDL Loans?

The EIDL program was originally designed to help businesses affected by natural disasters. During the pandemic, however, the SBA expanded the program to include businesses negatively impacted by the coronavirus pandemic. Small businesses that qualify for the program can borrow up to $2 million with loan terms of 3.75% fixed interest over 30 years.Recommended: How to Calculate Your EIDL Loan Amount 

What Are EIDL Grants?

Unlike EIDL loans, which must be repaid, EIDL grants do not have to be paid back. There are two COVID EIDL grant programs:
  • Targeted EIDL Advance
  • Supplemental Targeted Advance
To qualify for the Targeted Advance, your business must be located in a low-income community and be able to demonstrate that it has suffered a 30% or greater reduction in revenue over eight weeks starting March 2, 2020 or later. You also need to have fewer than 300 employees. This Targeted Advance provides a grant of up to $10,000.The Supplemental Advance has even more strict requirements. For a business to qualify, its economic loss must be 50% or greater and it must have 10 or fewer employees. This grant provides up to $5,000. Between the two, you can get no more than $15,000.

EIDL Grants Are No Longer Available

So is the 2021 EIDL grant still available? According to a recent announcement by the SBA, EIDL Targeted Advance applications will be accepted until December 31, 2021, and will continue to be processed after this date until funds are exhausted. Supplemental Targeted Advance applications will also be accepted until December 31. However, the SBA cannot continue to process these applications after that date and strongly encourages eligible small businesses to apply by December 10.

Are EIDL Loans Still Available?

For small businesses that have not yet applied for a COVID EIDL loan, December 31, 2021, is the deadline. These applications will continue to be processed into 2022 until the funds are exhausted, says the SBA.However, for those businesses wanting to do a loan modification increase request up to the current $2 million maximum, or that have been denied in the past six months or less and need to file a reconsideration request to appeal a decline, these will continue into 2022. In fact, borrowers can request increases up to their maximum eligible loan amount for up to two years after their loan origination date, or until the funds are exhausted, whichever is sooner.Non-COVID EIDLs, which are designed to help businesses located in regions affected by declared disasters, will continue. 

EIDL Loans vs EIDL Grants

To understand exactly how an EIDL loan compares to an EIDL grant, here’s a side-by-side comparison.

Key EIDL Loan Terms

When applying for an EIDL program, it can help to be familiar with the following terms:

EIDL

An acronym for Economic Injury Disaster Loan, EIDLs actually existed before the COVID-19 pandemic. It was — and still is — a program designed to support businesses who operate in a declared disaster zone. That includes areas of the country that have experienced hurricanes, floods, and droughts.The COVID-19 EIDL is a separate program that will eventually come to an end.

Collateral

The term collateral refers to an asset that a lender accepts as security for a loan. If you are unable to pay back your loan, the lender can seize these assets to cover your debt. The SBA requires collateral for EIDL loans of $25,000 or more.

Deferment

A loan deferment is an arrangement allowing you to postpone or reduce loan payments temporarily. The SBA understands that many businesses are still struggling and may not be able to afford to start paying on their EIDL loans right away. For this reason, it has implemented a two-year deferment, meaning you don’t have to pay anything on your loan for those first two years. Note that interest still accrues during this period.

Personal Guaranty

A personal guaranty is a signed agreement between lender and borrower where the borrower agrees to be personally responsible for the loan should their business default. For loans over $200,000, the SBA requires a personal guaranty.

How to Use EIDL Loans

There are a few EIDL loan use restrictions, but generally, you can use the funds for most operating expenses, including rent and/or mortgage, office supplies, inventory, payroll, and utilities. They can also be used to pay business debt incurred at any time (past, present, or future).You may not use the funds to:
  • Expand your business
  • Make prepayments on debt that is owned by a federal agency (including the SBA)
  • Start a new business
Recommended: Are EIDL Loans Forgivable? Rules and Guidelines 

Alternatives to EIDL Loans

If you don’t qualify for an EIDL program or don’t make the application deadline, you still have other options to get the funding your business needs. These include:

Conventional Small Business Loans

You may qualify for a traditional loan from a bank, credit union, or online lender. Some require higher credit scores, while others have less stringent requirements, though may offer less favorable terms. It can pay to shop around and compare small business loans

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.

Employee Retention Tax Credits

While it’s not a loan or grant, the IRS’s Employee Retention Credit is a tax credit that could put money back into your company’s coffers. If your business was ordered to shut down or experienced a significant decline in gross receipts during the pandemic, you may be able to receive a refundable credit of up to $5,000 for each full-time employee you retained from March 13, 2020, to Dec. 31, 2020, and up to $14,000 for each retained employee from Jan. 1, 2021, to June 30, 2021.

The Takeaway

If you were unable to get your application for COVID EIDL loan or grant in by the deadline, or your application was denied, you're not necessarily out of funding options. There are a number of other financing options for small businesses, including other types of SBA grants and commercial small business loans. If you’re interested in investigating loan options without making any type of commitment, Lantern by SoFi can help. With our online lending platform, you can explore rates from multiple small business lenders with just one application.
Photo credit: iStock/baona
This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice. The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.SOLC112264

About the Author

Susan Guillory

Susan Guillory

Susan Guillory is the president of Egg Marketing, a content marketing firm based in San Diego. She’s written several business books, and has been published on sites including Forbes, AllBusiness, and Cision. She enjoys writing about business and personal credit, financial strategies, loans, and credit cards. Follow her on Twitter @eggmarketing.
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