SBA Opens Up New Grants And Loans For Small Businesses And Independent Contractors: The EIDL Program

On June 15, 2020, the SBA announced that it had been again opening up it's Economic Injury Disaster Loan (EIDL) grant and loan program. this suggests that independent contractors, freelancers, and gig workers are eligible to receive a $1,000 grant that doesn't must be repaid.

Small businesses and agricultural businesses also may apply for the grant, adequate $1,000 per employee of the business up to a maximum of $10,000.

A loan for favorable terms from the SBA may be available. there's some uncertainty on the quantity available, but up to $150,000 or $2 million has been reported.



Under the CARES Act passed on March 27, 2020, independent contractors, gig workers, and independent workers affected by a coronavirus crisis are eligible for the grant. SBA sometimes refers to these grants as "predecessors", but you are not required to pay these funds to the government.

The application process includes filling out a simple SBA form requesting a disaster economic recovery loan, which saves advance even if the loan is not granted.

Initially, the $ 10 billion was earmarked by the government for these grants, but due to the massive amount of applications, SBA stopped accepting new applications in mid-April 2020 due to credits being disrupted for grants. But now SBA has lifted the suspension due to the legislation passed on April 24, 2020, which allocates another $ 60 billion to EIDL and grants under it.

Who is eligible for grants?


Disaster SBA loans and grants include the following eligible claimants:

  •       Independent contractors (for whom there are extended eligibility criteria)

  •       free business

  •       Individual ownership, with or without employees

  •       Party workers

  •       Small companies with less than 500 employees

  •       Agricultural business

You must be in business starting on January 31, 2020. Grants are available until December 16, 2020, but SBA money will soon run out, so you must submit your application as soon as possible.

Where can I apply online for an SBA scholarship?

The app can be found at covid19relief.sba.gov/#/. Basic information from SBA can be found at www.sba.gov/disaster-assistance/coronavirus-covid-19.

What advice is there to complete an SBA application if you are an independent contractor?


If you are an independent contractor, freelance, or gig operator, here are some tips for filling out an application:

  • In the Essential Question, check the third box while submitting you as an independent contractor or individual ownership.

  • You must add your Social Security number if you are applying as an independent personal contractor, or an independent, or disturbing worker.

  • The form will ask you for total revenue for the past 12 months for freelance contractor business as well as "Cost of products sold". You will estimate that this supports what happened in 2019. The cost of products sold means the expenses incurred in the process of presenting your product or service as an independent employee, gig operator, or independent contractor.

  • When the "owner" requests, put your name and the owner "100" percent.

  • It will launch the date the business was established. Often this is the date on which you started freelance work or work in the party or freelance contractor just an estimate if you don't have the exact date, but make sure it was before January 31, 2020.

  • The form will raise the current account to which you want to deposit the grant funds. You want the name of your bank and the account number (the middle number on the bottom side of the checks), and thus the routing number (the number on the lower left side of the checks). See the question below on the direct deposit.

  • For your business listing, it's okay to give away your cell phone number.

  • "Is your business owned by a commercial entity?" The solution is not because you are a private owner.

  • When the form requires your business name, just enter your name if you don't have a business name.

  • You can ignore the question "If anyone helped you complete this request ..." unless of course, you did get help.

  • Make sure to test the box that claims to use for a $ 10,000 grant (although it will only be $ 1,000 for freelance contractors, freelancers, and party workers).

The form should take about quarter-hour to fill out. After it's completed and submitted, the SBA will provide you with a confirmation number, so keep a replica of that for any follow-up.

How am i able to confirm I Provide My Correct Direct Deposit Information to the SBA?


Direct deposit information is as follows:

  • The name of your bank.

  • Your checking account number, which might be up to 17 characters. On the sample check below, the account number is 2020202086.

  • The “routing number” for your bank, which must contain 9 digits. On the sample check below, the routing number is 250250025.

  • Don’t include the check number (1234 on the image below).

  • Double-check that you simply have provided the right numbers.

sample check © WASHINGTON STATE EMPLOYMENT SECURITY DEPARTMENT



Be sure to incorporate your routing number and account number, as seen within the example above.

How Long Will It desire Get the Grant Money from the SBA?


The first grants took over a month to be issued; hopefully, newer grants are quicker.

The SBA has been directly depositing the grant money into bank accounts without notifying those that the funds are on the way or are deposited. So check your checking account regularly.

Do I would like to just accept an Economic Injury Loan to urge the Grant?


No. you'll be able to decide just to simply accept the grant you receive, and you are doing not should accept an Economic Injury Disaster Loan. But the loans have favorable terms, repayable in up to 30 years.

Do you've got to Pay Back the Grant?


No. It’s clear under the CARES Act that this is often a grant that doesn't have to be repaid. No interest payment is required either.

How are you able to Contact the SBA to Follow informed Your Grant Application?


The SBA website sets forth these means of contact:

  • Phone: SBA Disaster Assistance Customer Service Center at 800-659-2955


If you can’t get through to the SBA, try contacting the little Business Development Center (SBDC) in your area. for instance, the Northern California SBDC has been extremely helpful, and you'll be able to check with an individual life (see www.asksbdc.com or call 833-ASK-SBDC). Advisors can facilitate you with both the PPP loan process and also the EIDL loans/grants still as special programs in your state.