Small businesses that have been eagerly waiting for new information about a federal loan-advance program that would front them up to $10,000 in quick cash are finally getting an answer: Don’t call us, we’ll call you.
In a recent update, the Small Business Administration has provided additional details about the “targeted” advances that are part of the new round of COVID-19 Economic Injury Disaster Loans, or EIDL. Unlike the previous advances—which any small business could theoretically snag, even if it wasn’t approved for the loan—the new program will be eligible only to businesses located in low-income communities that can demonstrate “more than 30% reduction in revenue during an 8-week period beginning on March 2, 2020, or later.”
Moreover, the SBA said it will prioritize qualifying businesses in those neighborhoods that applied for but did not receive the full grant last time, or those that applied for it but did not receive anything. The original program was authorized in March of last year and was already out of money by mid-July.
Crucially, the SBA says it will contact applicants directly to tell them if they qualify for the grant, meaning businesses do not have to take additional action. “Please do not submit duplicate COVID-19 EIDL applications,” the SBA said in its update. “Only prior applicants will be considered for the Targeted EIDL Advance. SBA will reach out to you if you qualify!”
The subtext there is that the agency is likely trying to avoid the chaos and confusion that reigned supreme during the first round of grants as small businesses flooded the SBA with requests for cash. That the program is more targeted this time around is not surprising, as the open nature of the previous round made it subject to “widespread potential fraud,” the Office of Inspector General warned in July.
The good news is, the deadline to apply for an Economic Industry Disaster Loan has been extended to December 31 of this year, so even if businesses can’t get an advance, they have plenty of time to apply for a loan.
The SBA has not responded to multiple requests from Fast Company for additional information about the advances. However, the latest update at least provides some much-needed clarity for small businesses. You can read all about the EIDL program and the targeted advances here.