If you run any type of small business, consider applying for the Economic Injury Disaster Loan. The SBA brought the COVID small business loan back as of June 15, 2020.
The first round of the COVID small business loan and grant money (advances) ran out quicker than the government planned. As of June 15, 2020, though, the Economic Injury Disaster Loan is back. Small businesses and independent contractors can again apply for the SBA small business loan and grant funds. The program is on a first-come-first-serve basis, so act quickly.
What Is It?
The SBA COVID small business loan, which applies to independent contractors too, gives struggling business owners access to more capital. The application is for an SBA loan with affordable terms, but as a part of it, business owners may receive a grant (cash advance) of up to $10,000.
Anyone that has owned a small business and has been open since January 31, 2020, is eligible. The program runs through December 31, 2020, but like the first round, the money will likely run out, so the sooner you act, the better.
You can run any type of small business or agricultural business and qualify as long as you have fewer than 500 employees and run your business as one of the following:
- Independent contractor or freelancers
- Sole proprietorship
- Gig workers
- Small business
- Private and non-profit businesses
How Much Assistance Is Available?
Businesses may receive up to $10,000 in grant money (doesn’t require repayment) and up to $2 million for the loan. Please note, however, the SBA may limit the loan amount based on the demand. They are also limiting the grant money to $1,000 per employee with a maximum of $10,000.
If you run a sole proprietorship or work as a freelancer, for example, you’ll receive $1,000. But if you run a business with employees, you may receive up to $10,000 if you have 10 employees.
How Do You Apply?
You can apply for the COVID small business loan online. You’ll start with an eligibility screener that helps streamline the process. After answering a few questions about your business, its ownership, and how you operate, you’ll move onto the loan application, unless you are ineligible, which the system tells you right away.
You’ll need the following information if you apply for the loan/grant:
- Business name (your own name, if sole proprietor)
- EIN or SS number
- Gross revenues for 2019
- Cost of goods sold for 2019
- Other sources of compensation and amounts
- Business contact information
- Number of employees
The SBA processes applications on a first-come-first-serve basis and is currently working on applications previously submitted but that were not processed because of the lack of funds.
If your business was affected by the coronavirus and you’re struggling financially, consider applying for the COVID small business loan. Even if you don’t get loan approval, you may still get the emergency grant funds, helping you through an immediate disaster, while you figure out the rest.