For over 7 months, the SBA has had $20 billion to help eligible small business owners and independent contractors get $10,000 Targeted EIDL Grants. In the spring relief package, another $10 billion was added to this pot of money — along with an additional $5 billion for the $5,000 Supplemental Targeted Grants. However, hundreds of thousands of small business owners aren't eligible based on the strict rules in the legislation. As a result, $25 billion remains unallocated.
In this post we break down the latest on Targeted EIDL Grant approvals, along with Supplemental EIDL Grant approvals. Plus, we share our opinion and others' opinions on whether more people may become eligible for the $10,000 Targeted EIDL Grants.
Targeted EIDL Grant Approvals Remain Slow and Steady
The SBA just published their weekly report, which now shows that almost 314,000 Targeted EIDL Grants have been approved, along with 240,000 Supplemental EIDL Grants.
In terms of funding allocated, only $2.6 billion has been allocated from the $30 billion available for Targeted EIDL grants — less than 9% of available funding. Here's how the Targeted Grant and Supplemental Grant approvals look on a weekly basis since May.
$25B in Targeted Grants Funding Is At Risk of Being Taken Away
Besides the urgency that millions of small business owners face in this country — and the fact that $10K or $15K in extra funding can go a very long way — there is speculation that if not used soon, this funding could be reallocated elsewhere.
Now, as the new $1 trillion infrastructure bill is close to being finalized and signed into law, one of the key sticking points is how to pay for it. Early on in the infrastructure bill discussions, some lawmakers speculated that reallocating some SBA funding — including extra EIDL grant funding — could pay for this. Other sources familiar with the matter and discussions also speculated on this reallocation.
The fundamental question for the SBA remains: How are they going to distribute more Targeted and Supplemental EIDL Grants? More importantly, what can they do?
The SBA's Hands Are Tied When it Comes to Targeted EIDL Grant Approvals
As we've reported, the relief package signed into law last December specified clear rules for Targeted EIDL Grant eligibility: Have fewer than 300 employees, demonstrate 30% revenue reduction over an 8 week period, and live in a low-income community.
The last provision — live in a "low-income community" — has been the most controversial and has disqualified the most number of small business owners. Two weeks after the bill was signed, we launched a low-income community lookup on our app — which is based on census data — and it turns out many people do not live in one. The business owner may otherwise check all the boxes, including a real need for the grants, but would not receive one if they did not live in a low-income area.
This is why — as of today's date — only around 300,000 Targeted EIDL Grants have been approved. Last year, there were around 5 million individuals and small business owners who received initial EIDL grants, ranging from $1,000 to $10,000, from a $20 billion pool of money approved in the CARES Act.
The Law Would Have to Change for Increased EIDL Eligibility — And We Don't Think That's Likely
We've lobbied the SBA to work with Congress for months to change the low-income provision, thereby increasing the number of small business owners who can be helped. In fact, the SBA, from what we've heard, wants this change as well. However, lawmakers are busy with a hundred other things and this has not been a priority.
For a time, we remained optimistic that changes may come in some form or another — for the simple reason that over $20 billion is just waiting to be distributed to small business owners.
However, with the looming passage of the infrastructure bill, reallocation of funding becomes a more likely scenario. In fact, lawmakers have proposed redirecting $250 billion from COVID relief funds to help pay for the infrastructure bill.
At this point, lawmakers may be looking at the approximately $25 billion in unused EIDL grant funding as a line item to help balance the infrastructure proposal — this would pay for 2.5% of the infrastructure proposal.
Conclusion: Time Is Not on the Side of EIDL Grants
While we continue to remain optimistic, we're also realistic that the infrastructure bill passage may seal the fate of unused Targeted EIDL Grants. There are a couple things you can do that may still be helpful.
First, the SBA is still accepting new EIDL loan applicants — and by extension you can still qualify for the EIDL grants.
Second, there are still other grant programs out there, and we cover many of them on our app. In fact, we curate weekly grants and you can get two weeks access here.
As any new information becomes available, we'll keep you posted, and you can also get updated videos by subscribing to our YouTube channel or downloaded our free app, Hello Skip in the App Store and Google Play.