Funds Run Out for the EIDL "Advance" But Not the "Loan"

There are no more funds available for the Economic Injury Disaster Loan (EIDL) "advance" program.

This program offered $1,000 in a forgivable loan to family child care providers and other small businesses. Providers were eligible for $1,000 for themselves and an additional $1,000 for each of their employees.

Unfortunately, the Small Business Administration (SBA) announced in mid July that this program has run out of money.

EIDL "Loan"

Funds for the EIDL "loan" are still available. Providers can borrow tens of thousands of dollars at a 3.75% interest rate that must be paid back over 30 years. Funds for the "loan" can be used for any business expense except for repairs and fixed assets. Fixed assets are those items lasting longer than a year such as a fence, deck, home improvement and large equipment. You can use this "loan" for payroll for yourself.

You may receive an email offering you the EIDL "loan." You can choose to accept all of the offered "loan" or part of it. Or you may simply refuse to accept it. The EIDL "loan" is not taxable income and does not need to be reported as income if you are filing for unemployment benefits.

Here's an article in Forbes magazine about the EIDL program.

Note: The SBA Paycheck Protection Program (PPP) is still receiving applications. This is a forgivable loan. For more information, see my article: "Deadline to Apply for the Paycheck Protection Program is August 8th."

Tom Copeland - www.tomcopelandblog.com

Image credit: Small Business Administration