On March 27th, President Trump enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The historic $2.2 trillion stimulus bill includes $10 billion in funding to provide emergency grants to small businesses and nonprofits that apply for economic injury disaster loans.
Below, we address some of the common questions regarding this particular initiative. If you cannot find the answer to your question, please do not hesitate to reach out to your Cole Gavlas, PC accounting advisor for further assistance.
Who is eligible for an emergency economic injury grant?
Emergency economic injury grants are available to businesses and non-profits that apply for a Small Business Administration (SBA) economic injury disaster loan (EIDL). Typically, the timeline for EIDL approval and disbursement takes 3-4 weeks. That’s where the emergency economic injury grant comes in.
The goal of the emergency economic injury grant program is to provide a rapid funds advance within three days of the EIDL application. EIDL applicants simply need to request the emergency grant when they apply. The SBA will provide the grant within three days of receiving the EIDL application. Even if your application for the EIDL loan is denied, you do not have to repay the $10,000 emergency economic injury grant. That said, when you apply for the EIDL and request an emergency economic injury grant, you will be required to certify—under penalty of perjury—that you are eligible to receive an EIDL.
Please note: applicants must have been in operation on January 31, 2020 to receive the grant.
What can I use the emergency economic injury grant money for?
The grant can be used to provide paid sick leave to employees, maintain payroll, meet increased production costs due to supply chain disruptions, and/or pay business obligations (debts, rent, mortgage payments).
How do I apply for an emergency economic injury grant?
When you apply for an EIDL, you will have the opportunity to request the emergency grant at the same time. To apply for an EIDL, click here to visit the SBA website.
What if I apply for other SBA loan programs, like the Paycheck Protection Program?
You may apply for an EIDL, the emergency grant, and the Paycheck Protection Program (PPP). If you receive a loan through the PPP, the amount that is forgiven will be decreased by the $10,000 grant.