Where can you turn 10 minutes into $1000 in fast cash? On the SBA’s website.
The Small Business administration reopened its EIDL loan and advance program on June 15. If you’re wondering, EIDL stands for Economic Injury Disaster Loan.
The EIDL grant for freelancers
Under the rules, if you apply for an EIDL loan, you can get an advance of $1,000 per worker, up to $10,000. So, the EIDL grant for freelancers with no employees is $1,000.
And you get that money regardless of the status of your application.
The idea behind the advance is to get money into a business owner’s account fast to help avert or address disaster.
And the most stellar thing about that advance is YOU DO NOT HAVE TO REPAY IT, which is why many people refer to it as an EIDL grant.
Another great thing is that if you’re eligible to apply for an EIDL loan, you’ll get the EIDL grant whether or not you’re approved for a full loan.
That’s right. The SBA could decide they’re not lending you any money. But they’re still going to give you that $1000 advance because we’re in the midst of an economic crisis, and that’s how Uncle Sam rolls.
After all, what’s a grand to the USG?
But what if you are eligible for the loan but you don’t want to take on a chunk of debt?
Then, don’t accept the loan.
You can take your $1,000 EIDL grant and say no thanks to the rest.
An EIDL grant can come in real handy if you need fast cash because the rules require the SBA to issue your advance within three days.
If you’re approved for the loan and you are open to taking it, the terms are attractive, especially compared to what you’re likely to be offered by a bank. You can read about them here.
Also, keep in mind that if you’re approved for a $5,000 EIDL loan, for example, the $1,000 advance will be deducted from that. So, you’ll only get $4,000 in your second tranche.
How Complicated is an EIDL Grant for Freelancers?
The EIDL loan application says the estimated time for completing it is two hours and ten minutes. But that must be for large corporations.
I’ve seen the process completed by freelance or self-employed people more than once, and it was done in the 10 to 15-minute range.
The application starts off really basic, with checkboxes about your company size and type and then eligibility questions about illegal activities, child support, gambling, whether you’re running a sex-industry business and that sort of thing.
Then, you’re asked about basic questions about your business, like where it’s located, earnings, how many employees there are and what type of other financial assistance you’re applied for.
You don’t have to upload or submit any documentation. So, don’t worry about having to dig up a bunch of information.
Warning: If You Received A PPP Loan…
The Payroll Protection Program lets freelancers pay themselves with government money. And as of June 19, freelancers are eligible for 100% forgiveness of their PPP loans.
Under the current rules of these two federal programs, THAT WILL CHANGE if you get an EIDL grant on top of the PPP loan.
You’re not barred from getting the EIDL grant if you got a PPP loan, but you WILL have to pay the EIDL grant back through your PPP lender.
When you apply for PPP loan forgiveness, there’s an area on the application where you’re supposed to report your EIDL grant money. The grant funds will be broken out and must be repaid to the bank that issued the PPP loan.
So, say you already received $5,000 though the PPP program. Then, you received a $1,000 EIDL grant. The bank can only forgive $4,000, and you’ll owe $1,000.
So, in the end, the federal government still gave you $5,000.
Depending on when you took out your PPP loan and how friendly your bank is, you’ll have between two years and 5 years to repay that $1,000 EIDL grant with 1% interest, which isn’t a bad deal if you need the money now.
The EIDL program closes December 30. The PPP program closes June 30.