Over the course of the COVID-19 pandemic, the Small Business Administration (SBA) has been charged with the challenging task of managing important relief programs including the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) program. The ongoing changes, clarifications, and updates have left many borrowers’ and applicants’ heads spinning as they try to understand the latest guidance and how it applies to individual situations.
Much of the activity has subsided now that the PPP is no longer accepting new applications and the EIDL rules have been refocused on certain businesses. However, two important updates are reportedly coming, and they’ll impact both PPP and EIDL recipients. To help you prepare for these changes and how they may affect you, here’s a summary of the key details.
Release of PPP Loan Data
According to reports, the SBA plans to make PPP data public in the coming months. Under the Trump Administration, there was significant pushback to releasing any data for loans made in 2020, but due to a court ruling, certain details had to be released. In the coming months, the SBA will be releasing detailed information on the over 6 million loans made since the program was launched.
Although useful for transparency purposes, the reality is many business owners may not want information on the number of PPP loans received and the amount of each loan made public. The availability of such sensitive financial information to customers, vendors, suppliers, banks, and others, may create unexpected issues and challenges in the months ahead. It will be interesting to see how, and if, businesses are adversely affected by the release of this information.
Targeted EIDL Advances – Background
These advances were introduced in late 2020 as part of the changes implemented under the Consolidated Appropriations Act, 2021. These advances are designed to provide businesses and organizations in low-income communities with the additional working capital needed to continue operations throughout the recovery. An advance of up to $10,000 is available to applicants who were previously approved for an advance of less than $10,000 but did not receive any money due to funding issues.
The SBA advised that applicants did not need to act because the agency would reach out to those that qualified. In other words, participation was by invitation only. The SBA started by reaching out to applicants that already received a partial EIDL and then shifted to those who applied prior to December 27, 2020, but did not receive an advance.
What’s the Latest?
According to another interview with Izabel Guzman, there have been over 500,000 emails sent to businesses that qualify under the original guidelines for a targeted advance. However, a dramatic expansion of the program is now expected and could be announced as soon as this month. The change is expected to expand eligibility to small businesses in several industries that meet the eligibility requirements, which include operating in a low-income area and having experienced a significant drop in revenue over the course of the pandemic.
The expansion of the Targeted EIDL Advance is good news for Ohio, Kentucky, and Indiana small businesses that have limited relief options due to the closure of the PPP. Since the advances do not need to be repaid, they’re an attractive option for managing critical business needs.
The expansion of the targeted advance program is good news for small businesses continuing to struggle with the challenges created by the pandemic. This is especially true now that the PPP is no longer accepting new loan applications.
Have questions on any of the above, need help with PPP loan forgiveness, applying for the Employee Retention Tax Credit (ERTC), or other questions or issues, contact us – we’re here to help!