2021 Targeted EIDL Advance Grant: How It Works & How To Qualify
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US small businesses have been a major casualty of the COVID-19 crisis, but the CARES Act that passed in April 2020 brought struggling businesses at least some degree of relief. One of the small business funding programs funded under the CARES umbrella, Economic Injury Disaster Loans (EIDL), included a forgivable cash advance — essentially a grant — of up to $10,000 from the SBA. However, many businesses received far less than the full $10,000, as the money for this program was quickly depleted.
Businesses waited for the better part of a year for the EIDL program to be renewed. Finally, after many frustrating months, on December 27, 2020, the COVID-19 Targeted EIDL Advance was signed into law as part of the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act. However, the rules are a little different this time around. Read on to learn what the Targeted EIDL Advance/Grant is and if you’re qualified.
Table of Contents
What Is The Targeted EIDL Advance Grant Program?
SBA EIDL Advance Grants were renewed in the December 27, 2020, coronavirus stimulus package. There have been a few changes to how the 2021 EIDL Grants work that are intended to target businesses with the most need.
The new Targeted EIDL Grants for 2021 can still be as large as $10,000 and still do not need to be repaid. But this time, they are restricted to previous EIDL Grant applicants that received less than the full $10,000. As of this writing, you do not need to apply for this grant; the SBA will reach out to you if you are eligible. Previous EIDL applicants that received a partial EIDL Advance between $1,000 and $9,000 are eligible, as are those that previously applied for an EIDL Grant but didn’t receive one due to a lack of available funding.
Another change with the new program is that now you can deduct grant money spent on normally deductible expenses from your taxes. Additionally, the grant money you receive through EIDL no longer counts against the amount of money you can have forgiven from your PPP loan.
Also, the program is now restricted to businesses located within economically distressed areas, and you need to have suffered at least a 30% loss in income due to COVID during an eight-week period beginning on March 2, 2020, or later. Read more about those restrictions below.
How To Qualify For The Targeted EIDL Advance
You may qualify for the Targeted EIDL Advance in 2021 if:
- You previously applied for an EIDL Grant but didn’t receive the full $10,000. This includes businesses that applied but didn’t receive any EIDL Advance/Grant funds and businesses that only received a partial EIDL Advance/Grant between $1,000 and $9,000.
- Your business is located in a low-income community. Low income is defined as an area with a poverty rate in excess of 20% or an area where the median household income falls below 80% of your state’s median household income. Your community is the census tract you’re located in. If you’re located in a metropolitan area, you can also qualify if your area has a median income of less than 80% of your metro area in general. If you’re an independent contractor, or you don’t have a brick-and-mortar business location, you’ll use your home address to determine your business location.
- You can demonstrate a 30% loss of income due to the COVID pandemic. To qualify, you’ll compare any eight-week period in 2019 to the same eight-week period in 2020, starting March 2, 2020, or later. If you started your business in 2020, you can compare Q1 2020 income with Q2 or Q3 income, but you won’t be eligible if you weren’t in business as of January 31, 2020.
How To Apply For A Targeted EIDL Advance
You can’t currently apply — the SBA will contact you if you qualify.
The SBA will initially reach out to previous EIDL Grant applicants that only received a partial EIDL Advance (between $1,000-$9,000). Next, the SBA will reach out to those that applied for an EIDL Grant in 2020 but didn’t receive one due to a lack of program funding. Communications from the SBA will come from an official government email with an @sba.gov ending.
Even though you don’t have to apply, you will still be asked to submit documentation if the SBA reaches out to you. The SBA email will include instructions to determine your eligibility (including low-income location and reduction in revenue requirements) and information about the documentation you need to submit.
EIDL Advance FAQs
More Funding Resources For COVID Relief
The new EIDL Grant for 2021 is a lot more restrictive in what types of businesses will be accepted. This time around, you will have to prove your business suffered a loss, and you’ll only qualify if your business is in a low-income area. The program is also closed to first-time applicants. However, even if you don’t qualify for the 2021 EIDL Grant, that doesn’t mean you aren’t eligible for any other government-funded small business COVID relief — such as the PPP program, which has also been renewed in 2021. Check out these additional funding resources for small business coronavirus relief options:
- PPP Round 2: Main Differences Between The First & Second Round Of PPP Funding
- 7 Lenders That Are Offering Second Round PPP Loans Online
- 5 Banks That Are Currently Accepting Round 2 PPP Loan Applications
- Don’t Want (Or Were Denied) An EIDL Or PPP Loan? Here Are Your Best Small Business Loan Alternatives
Shannon Vissers
Shannon is a writer and editor based in San Diego, CA. Shannon attended San Diego State University, graduating in 2005 with a BA in English. She is the former editor-in-chief of SteelOrbis, an online trade publication. Shannon has also published articles for LIVESTRONG.COM, eHow, Life'd, and other websites. She has been with Merchant Maverick since 2015, writing about POS software, small business loans, and financing for women entrepreneurs.
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Can I get EIDL grant round 2 if I was denied the first round ? Please I am dying I need help.
Hi David,
It’s a bit unclear. As we understand it, you will not be eligible to receive the forgivable grant if you did not previously apply for an EIDL Grant in 2020. It doesn’t say “get approved”, so it seems like the possibility is there. The one thing we know for certain is that there is no way to apply currently–the SBA has a “don’t call us, we’ll call you” approach this time around. So, if you are eligible, they will contact you, which will no doubt leave many feeling unsettled, not knowing.
If you are interested in a forgivable PPP loan, you could try for round 2. Or possibly unemployment assistance. I’m not sure what type of business you have, so I can’t make many more suggestions, but definitely check out our COVID hub for all sorts of helpful resources. I’m so sorry you are in this situation and I truly wish you the best!
None of these sites know what they are talking about? It didn’t even open today. You all know as much as anyone else… Nothing!
This comment refers to an earlier version of this post and may be outdated.
Hi Ken,
We only know as much as the SBA shares, and a lot of their language has been incredibly vague. But we do our very best to interpret accurately and relay to our readers as soon as new information is made available to us. You can always find our sources linked at the bottom of the page, and in this particular post, the linked source is the SBA’s EIDL page. If you think we’ve misinterpreted something, please let us know!
I applied for an EIDL loan. My application number is: xxxxxxxxxx. Just replying for an update although I know that there are others being processed ahead of me. I am an patient person. I just need to know if it were received and filled out with all the information needed to move forward. Thanks for all your support. Stay safe.
This comment refers to an earlier version of this post and may be outdated.
Hi Brenda,
I removed your application number, as we are not the SBA and I don’t want your information getting into the wrong hands. I wish we could tell you the status of your application, but not only are we not the SBA, but we also have no affiliation to them whatsoever, so unfortunately we can’t offer any kind of update. That said, we do have a post that explains the ways you can check the status. I hope that helps, and we wish you the best!
This comment refers to an earlier version of this post and may be outdated.
I applied for a sba grant disaster injury loan iand july 6 it was approved and now it has almost a month on August 6 2020 how long do I have to wait for the money to be directly deposited into my account I need the money to register my car before August the 28 2020 and to pay some bills and to send for my husband and son who’s in Jamaica on vacation
This comment refers to an earlier version of this post and may be outdated.
Hi Barbara,
There isn’t a set timeline, unfortunately. The processing time seems to look different for every applicant.
This comment refers to an earlier version of this post and may be outdated.
I would like to check my status on my application loan covin 19
This comment refers to an earlier version of this post and may be outdated.
Hi Hellica,
We have a post that explains How To Check The Status Of Your EIDL and Emergency Advance. I hope this helps!
This comment refers to an earlier version of this post and may be outdated.
Yes same here I applied as the ability to do so became active ,I called the number above and was informed that no information for my application was available and that it could take up to 6 weeks from application date before information would be available .my buisness will go under ,no doubt about it ,but will the funds be available in time to restart and begin to build again ,hope is nearly lost .maybe some of us small businesses will make it .God bless.we need it now.
This comment refers to an earlier version of this post and may be outdated.
This information is wrong. When you call the SBA 800 number to inquire about the status of your EIDL advance application they simply say that there is no way for them to check the application status. It’s unfortunate the blogs keep distributing incorrect information.
This comment refers to an earlier version of this post and may be outdated.
Hi Kam,
Our information is sourced from the SBA, but as we warn readers in our How To Check The Status Of Your EIDL post, many have reported difficulty getting an update.
This comment refers to an earlier version of this post and may be outdated.