CARES Act: Emergency EIDL Grants
Under Section 1110 of the CARES Act, Congress authorized certain advances in the amount of $10,000 to small businesses to assist with the impacts of COVID-19. These $10,000 payments are more in the nature of a grant and are not expected to be repaid by the recipient.
Eligible Entities:
- Businesses with not more than 500 employees
- Sole proprietorships, with or without employees or independent contractors
- Cooperatives with not more than 500 employees
- ESOPs with not more than 500 employees
- Tribal concern or business with not more than 500 employees
Advance:
The payment is a $10,000 advance on a 7(b)(2) loan –
disaster relief loans for small businesses under Section 7(b)(2) of the Small
Business Act.Repayment:
The $10,000 advance does not need to be repaid even if the business is turned down for the 7(b)(2) loan.
Use of Funds:
The funds may be used for any purpose allowable under Section 7(b)(2) including:
- Providing sick leave to employees unable to work due to the direct effect of COVID-19
- Maintaining payroll during business interruption or substantial slowdowns
- Meeting increased costs to obtain materials unavailable due to interrupted supply chains
- Making rent or mortgage payments
- Repaying obligations that cannot be met due to revenue losses
Impact on Payroll Protection Program Loan:
The amount of the $10,000 advance is subtracted from the forgiveness available under a 7(a) loan made under the Payroll Protection Program.
Applications are submitted directly to SBA at SBA Emergency EIDL Grant
Tim Lynn
315-766-2118
tim@ldts-law.com
