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What Is The SBA Supplemental Targeted EIDL Advance & Is My Small Business Eligible?

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Erica Seppala

Erica Seppala

Expert Analyst & Reviewer: Finance, Accounting, POS 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.
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14 Comments

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    Pete Bracken

    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?

      Erica Seppala

      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!

        Eric Wong

        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?

          Erica Seppala

          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!

            Nick

            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

              Erica Seppala

              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!

                Barbara H Kuznesof-Knee

                Does PPP and HHS grants need to be included in gross receipts?

                  Erica Seppala

                  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.

                    Nathan

                    SBA portal said funded for my target advance over 2 weeks ago, and still no fund in my account.

                      Denah Zerr

                      shouldn’t matter where your business is located if you don’t make money there.! Look at the income not the address!

                        Claudia Decker

                        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

                          Erica Seppala

                          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!

                            Michael Garry

                            PUA is UNEARNED income. It should NOT be included as gross receipts or any income.

                              Erica Seppala

                              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!

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