What Is The SBA Supplemental Targeted EIDL Advance & Is My Small Business Eligible?
-
Expert Analyst & Reviewer
- 17 comments
- Updated on:
Advertiser Disclosure: Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity.
We’re well into 2021 and although there’s a glimmer of hope on the COVID-19 front, there are lingering problems that we wish had stayed back in 2020. As a result, many small business owners are still trying to play catch up to keep their businesses afloat and to pick up and salvage the pieces of businesses that were ravaged by the effects of a global pandemic. For many business owners that have seen a decline in customers or who had to close their doors completely, the financial burden continues to be a bother.
Fortunately, the government has allotted funds to continue to support the hardest-hit businesses. One new funding opportunity to consider is the Supplemental Targeted EIDL Advance, which became available on April 22, 2021.
In this article, we’ll do a deep dive into what this program is, who qualifies, and how you can apply. Even if you’ve received other types of funding from the Small Business Administration, keep reading — this may provide an additional funding opportunity to help your business during the pandemic.
Table of Contents
What Is The Supplemental Targeted EIDL Advance?
The Small Business Administration (SBA) has numerous loan programs available to small business owners. Because the SBA guarantees a large portion of the loans, lenders are more apt to offer funding to small businesses that wouldn’t qualify for bank loans and other traditional financing. One SBA program that has recently garnered attention as a result of COVID-19 is the Economic Injury Disaster Loan (EIDL).
This loan program was designed to help business owners impacted by disasters — think a tornado or flood. However, many small business owners have been able to qualify for an EIDL as a result of the coronavirus pandemic. In addition to the traditional EIDL program, legislation passed by former President Donald Trump and current President Joe Biden has expanded lending options for small business owners.
Most recently, the American Rescue Plan Act of 2021 (ARPA) signed by President Biden introduced the Supplemental Targeted EIDL Advance. Under ARPA, $5 billion was allotted to this program for eligible small business owners. Small businesses impacted by COVID-19 can receive $5,000 if they meet the criteria set forth by the SBA and have previously completed the Targeted EIDL Advance application (which is not the same thing as the Supplemental Advance application).
The Supplemental Targeted Advance program is now officially open, having launched on April 22, 2021.
Who Is Qualified For The Supplemental Advance?
Not all businesses will qualify for the Supplemental Advance, even if they’ve previously qualified for or received an EIDL loan, EIDL Advance, or EIDL Targeted Advance. Eligible small businesses must meet all of the following requirements to receive the $5,000 Supplemental Advance:
- 10 or fewer employees
- In operations on or before January 31, 2020
- Located in a low-income community
- Must have been negatively affected by the COVID-19 pandemic
- Must demonstrate a revenue loss greater than 50%
If you meet all of these requirements, your business may qualify for the Supplemental Advance. If you have previously received the original EIDL Advance in the full amount of $10,000, you may still be eligible for the Supplemental Targeted Advance if you meet the above eligibility criteria. The combined amount of the Supplemental Targeted Advance ($5,000) with any previously received EIDL Advance or Targeted EIDL Advance ($10,000) cannot exceed $15,000.
When & How You Can Get A Supplemental Advance
The SBA is now directly contacting business owners who have previously completed the Targeted EIDL Advance application to a) inform them that they may qualify for the Supplemental Advance, and b) tell them how to apply for the Advance. Only those businesses who have been emailed by the SBA about the program may apply; there is no application portal open to the general public.
For those business owners contacted by the SBA about their possible eligibility for the Supplemental Advance, applications will be processed on a first-come, first-served basis.
The SBA is alerting would-be applicants that all application decisions or requests for additional information will be sent from an official government email account ending with @sba.gov. Do not send sensitive information via email to any address that does not end with @sba.gov.
More Funding Resources For COVID-Affected Businesses
Aside from the Supplemental Targeted EIDL Advance, there are other financing opportunities available. You can apply for the EIDL, which offers up to $500,000 to help cover operating expenses. You can get started with your application through the SBA website.
You may also qualify for an EIDL Targeted Advance. If you applied for an EIDL Advance and didn’t receive the full amount of your advance, the SBA may be in contact soon. Qualified small businesses may receive up to $10,000 if they didn’t receive any EIDL Advance funds or just a portion. There is no application process, and the SBA will reach out to qualified small business owners that previously applied for the Advance.
If you need help covering payroll and other expenses such as utilities or rent, you may also qualify for a Paycheck Protection Program (PPP) loan through a participating lender. Even if you’ve previously received a PPP loan, you may qualify for another round of funding provided you meet certain requirements. Ready to get started? Try one of these online lenders.
Don’t delay in getting started. Funding for programs may run out, and there are deadlines that must be met in order to receive funds. While the future is still uncertain, you can make sure your business is financially sound as we continue to fight against this storm. Good luck!
Erica Seppala
Expert Analyst & Reviewer at Merchant Maverick
An expert in accounting, finance, and point of sale, Erica has been researching and writing about all things small-business since 2018. Erica's insights into personal and business finance have been cited in numerous publications, including MSN, Real Simple, and Reader's Digest. She is a graduate of Limestone College.
View Erica Seppala's professional experience on LinkedIn.
Latest posts by Erica Seppala (see all)
- The 8 Best Nanny Payroll Software - April 21, 2022
- 9 Best Food & Delivery POS Systems For 2022 - April 12, 2022
- What Is An Underpayment Penalty & Do You Have To Pay It? - March 10, 2022
- Can You Claim The Qualified Business Income Deduction? - March 3, 2022
- 8 New Tax Laws For 2021 That You Need To Know - February 23, 2022
Is it 10 full time employees? My business has 11 workers, but 2-3 are just fill ins that might only work 1-2 days a month.
Hi Ciji!
According to everything we’ve read from the SBA, you’d count full and part-time W-2 employees. If the part-time workers are independent contractors, they wouldn’t be counted as employees. However, if they’re a W-2 employee, they would be counted, regardless of how often they actually work for the business. Hope that’s helpful!
After much research I am under the impression the calculation I can and should use to pay myself is line 31 of my 2020 schedule c. So if that number is $10,000 I can use $10,000 of the eild targeted advance to pay myself. Am I correct here?
Hi Pete!
You can definitely use your EIDL Targeted Advance to pay yourself. This is only allowable for work you perform within the business — funds can’t be used to pay dividends or bonuses, for example. You can certainly use the amount found on line 31 of your Schedule C to determine how much to pay yourself. One calculation that I’m seeing many people do is divide this number by 12 to determine average monthly payroll. They are then paying themselves that amount each month until funds are depleted. Of course, you can also use the funds for other operating expenses that would have been normally met if not for the pandemic. As a reminder, make sure that you keep records and receipts showing how funds were used in the event of an IRS audit. Good luck!
Since I will use my EIDL to pay for myself as my salary, am I able to collect my EDD (unemployment insurance) at the same time?
Hi Eric,
Unfortunately, “double dipping” isn’t allowed with the EIDL and unemployment benefits. You can receive an EIDL and still draw unemployment. However, the EIDL must be used for other business purposes, not for paying yourself a salary, in order to still receive your benefits. Good luck!
Can you please help me receive mine
Hi Erica –
I got the email invite today and applied. I work as a theatre sound designer and producer independent contractor on the side. I am confused what the funds can only be used for if you’re an independent contractor/sole proprietor. I design sound out of my house. I dont rent another building for example for my business. It says Targeted EIDL Advance and Supplemental Targeted Advance Grant funds can be used for “working capital capital and normal operating expenses that could have been met had the disaster not occurred. Those include (but aren’t limited to) continuation of health care benefits, rent, utilities and fixed- debt payments.”
I get my health insurance through my spouses day job and we have a mortgage, but thats personal. I’m worried I qualify for this AND I wont know how to properly use and report the funds with what I do for gig work. Any thoughts? Nick
Hi Nick!
There are a number of ways that you can use Targeted EIDL funds and Supplemental Targeted Advance funds. Essentially, you can use funds to cover any day-to-day operating expenses. This includes supplies and inventory, utilities for a home office, or bookkeeping or accounting services or software. You can also use funds to pay yourself provided that the payment is for work done within the business. You also can’t pay yourself if you’ve previously received a PPP loan and used that to pay yourself for the same period.
There are a lot of ways to use these Advances, and you can gain a better understanding of how they are used by checking out our post, How You Can (& Can’t) Use Your Economic Injury Disaster Loan & Advance. This post offers more examples of how the EIDL loan and its Advance program funds can be used.
However you choose to use your funds, make sure to keep documentation on-hand to verify these purchases. This could be in the form of payroll records, bank statements, and receipts. Good luck!
Does PPP and HHS grants need to be included in gross receipts?
Hi Barbara,
Funds received through the PPP are not included in gross receipts. HHS grants, such as the Provider Relief Fund, are considered taxable income and are included in your gross receipts.
SBA portal said funded for my target advance over 2 weeks ago, and still no fund in my account.
shouldn’t matter where your business is located if you don’t make money there.! Look at the income not the address!
I have a question: When filling the Targeted EIDL and Supplemental EIDL do you include in the Gross Receipts PUA (covid unemployment) received in 2020? I am a sole proprietor.
Thank you
Hi Claudia,
The SBA defines gross receipts as follows: “Gross receipts include all revenue in whatever form received or accrued (in accordance with the
entity’s accounting method) from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees or commissions, reduced by returns and allowances for the applicant business.” There is no specific SBA documentation stating that PUA needs to be included in your calculations.
Check out the SBA Targeted EIDL and Supplemental Advance FAQs for more information about qualifying for, applying, and receiving funds under these programs. Good luck!
PUA is UNEARNED income. It should NOT be included as gross receipts or any income.
Hi Michael!
In my response, it was noted that PUA does not need to be included in calculations of gross receipts. I also provided the SBA definition of gross receipts to make it clear to readers what should be included in these calculations. Thanks for your response!