Economic Injury Disaster Loan Emergency Advance
Two consecutive days of blue skies, nice weather and clients informing us that they received an Economic Injury Disaster Loan Emergency Advance (EIDL), has improved the ability for many to think positive thoughts. With numerous programs in place, specifically the EIDL and the Paycheck Protection Program (PPP), clients who received the advance (this week), are wondering what to do with it in conjunction to the PPP funds they received before the advance arrived. Everyone who received an advance, should be cognizant of the interpretations of the guidance provided by the Small Business Administration (SBA.gov).
On the SBA website, under eligibility, it states “The Economic Injury Disaster Loan advance funds will be made available within days of a successful application, and this loan advance will not have to be repaid.” We have heard from clients that they applied for the advance on or before April 3rd , but did not know the status of the advance before they applied or received a PPP loan, making it impossible to include the advance in the PPP calculation.
The advance may have an impact on the amount of PPP eligible for forgiveness. The EIDL funds can be used for costs outside the scope of the PPP, and the EIDL advance should not to be confused with an EIDL loan.
We recommend that you speak with your lender to determine what your PPP forgiveness amount will be, and what effect, if any, your EIDL advance will have on the forgiveness amount.
DISCLAIMER: The WM Daily Update COVID-19, COVID-19 Business Resources and COVID-19 Client News Alerts and other related communications are intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.
