Small companies can get a second PPP however not a second EIDL mortgage

Jovita Carranza, Administrator of the US Small Business Administration, testifies at a Senate Committee on Small Business and Entrepreneurship hearing on June 10, 2020 in Washington.

Al Drago Pool / Getty Images)

Second EIDL grants

This can be confusing for business owners as Covid’s $ 900 billion aid package passed last month allows some businesses to get a second EIDL grant.

These grants were a new facet of the disaster loan program that was available prior to Covid to cover lost revenue due to hurricanes and other events. (The federal government has expanded availability for businesses across the country due to the pandemic.)

The CARES Act allowed entrepreneurs to apply for grants of up to $ 10,000 through an EIDL advance that did not have to be repaid. The amount of the grant was based on the number of employees in a company.

Now business owners can get another grant. The legislature also lifted the size limit. Eligible entrepreneurs will receive the difference between $ 10,000 and their initial grant allowance. (First-time applicants would be eligible for $ 10,000.)

Applications for a second grant – a targeted EIDL advance – will be available in the coming days, Clements said. The relief bill provided $ 20 billion for the measure.


The first $ 20 billion in grants under the CARES bill expired by July. Almost 6 million companies have been funded.

Affected entrepreneurs may be frustrated that they cannot take out a second EIDL loan. Many may need additional funding to survive until a Covid vaccine is widespread and the economy recovers.

Small business revenue fell by nearly a third, and 30% of small businesses closed last year, according to Opportunity Insights.

“It hurts badly,” President-elect Joe Biden said in a speech Thursday night in which he outlined a $ 1.9 trillion aid package, the American Rescue Plan, that would provide additional grants to small businesses.

Lower-income communities

EIDL grants are only available to companies in low-income municipalities whose income has fallen by at least 30% in an eight-week period since the beginning of March (compared to the same point in time in 2019).

A focus on companies in less affluent neighborhoods is in line with that of the new PPP financing.
This pandemic-era loan program reopened to applicants Monday through a few lenders in the community focusing on underserved borrowers.

DEA / M. BORCHI | De Agostini | Getty Images

“What [lawmakers are] Trying to do with the second round PPP and the EIDL grant is to get money to those minority small businesses that got out of the way in the first round, “said Brooke Lively, president of Cathedral Capital , the financial work for them is done by small business customers.

Federal lawmakers use the same metrics as a new market tax credit to determine what constitutes “low income”. The law defines such a disadvantaged area as one where the poverty rate is above 20%, although other measures may also apply.

PPP loan

PPP applicants can receive a maximum loan of USD 2 million in the second round of funding. You must have 300 or fewer employees and a 25% loss in revenue (in each quarter of 2020 from the same period last year) to be eligible.

The Discharge Act also removes a previous requirement in the CARES Act that EIDL grants must be deducted from the forgivable amount of a PPP loan.

Shuttered Venue Operators Grant

A separate grant, the Shuttered Venue Operators Grant Program, will also be open to applicants in the coming days, Clements said.

The federal government is providing $ 15 billion to operators or organizers of live venues, museums, cinemas, theater producers, and live performing arts venues that have lost 25% revenue due to the downturn in Covid.

Businesses can receive initial grants of up to $ 10 million and additional grants of up to half.

The program is initially open to companies that have lost 90% or more of their sales.

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