This article first appeared on the Business Journal’s website.
The Small Business Administration still has tens of billions of dollars left in its Targeted Economic Injury Disaster Loan Advance grant program — and just two full months remaining for small business owners to claim it.
So far the $10,000 grant program has funded 447,473 grants for a total of about $3.8 billion, according to SBA data through October 21.
That is just a tiny fraction of the $30 billion Congress approved for the $10,000 grant program. And while early data showed enormous need from small businesses for the grant program, a stipulation that businesses must be located in low-income areas has dampened its utility. That requirement has left small-business owners outside those borders frustrated, even if they initially received a partial grant in 2020.
And a follow-up grant by the SBA, the Supplemental Targeted Advance available to the smallest businesses that had received the initial Targeted EIDL grant, has disbursed about $1.8 billion to 359,864 businesses. Congress had given the SBA $5 billion for that program.
Both of these grant programs expire at the end of 2021, which means small business owners only have a couple months left to claim them. In order to apply for a grant, a small business owner must also apply for an Economic Injury Disaster Loan, but the small business owner does not have to accept any loan, and does not need to be approved for one in order to qualify for the grant. Business owners can apply here.
The Small Business Administration has so far disbursed millions of loans under its EIDL program. So far the agency has approved more than 3.8 million loans for more than $283 billion. Small business owners can also now apply for EIDL loans of more than $500,000 and up to $2 million. The long-anticipated increase in the loan limit was part of a package of changes SBA recently made to the program.
That includes tweaks to affiliation rules, expanded loan opportunities for larger businesses and — perhaps most importantly — an expansion of what the loan funds can be used for. EIDL proceeds originally could not be used to pay down debt, but now small-business owners can make debt payments, pay deferred interest and even prepay certain kinds of debt.
But the SBA has also drawn fire from what Republicans in Congress have said was poor communication and a lack of fixes for small business owners lost in loan limbo. Reps. Blaine Luetkemeyer, ranking member of the House Small Business Committee, and Patrick McHenry, ranking member of the House Financial Services Committee, said in a letter to SBA Administrator Isabel Guzman October 18 that an overall lack of communication is hamstringing small business efforts to obtain EIDL loans.
Read more about those issues here.
The SBA also continues to make tweaks and changes to other programs. It temporarily suspended a rule that requires small business contractors in its 8(a) Business Development Program to be physically located near potential project sites to be able to bid for the work. The agency has also made $1.2 billion in follow-up awards under its Shuttered Venue Operators Grant program.
SBA’s Paycheck Protection Program direct forgiveness portal also continues to pick up steam which the SBA has grown to more than 1,400 lenders since its launch over the summer. The agency has forgiven more than 7 million PPP loans across both the 2020 and 2021 programs. As we reported, the SBA and some lender groups briefly clashed over how the agency would approach forgiveness for 2020 loans.
Meanwhile, small business owners might get more assistance from a $100 million Community Navigator Pilot program the SBA announced earlier this year. The agency said it would soon be making announcements around awards aimed at strengthening a system of small business assistance around the country.