TUCSON, Ariz. (KOLD News 13) - Some of the promises made in the CARES Act are not looking so promising for small businesses and non-profits.
The Small Business Administration is notifying applicants of the Economic Injury Disaster Loan of how the $10,000 advance will work.
Rhe EIDL provides vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing as a result of the COVID-19 pandemic, according to the SBA’s website.
This program is for small businesses with less than 500 employees (including sole proprietorship, independent contracts and self-employed persons), private non-profit organizations or 501(c)(19) veterans organizations affected by COVID-19.
The SBA’s website says, “this loan advance will provide up to $10,000 of economic relief to businesses that are currently experiencing temporary difficulties.”
This advance will not have to be paid back, even if businesses are ultimately turned down for the EIDL loan.
Eric Freeman, a CPA and Tax Senior Manager with BeachFleischman, said some applicants are receiving disappointing news.
“This morning, people started getting e-mails from the Small Business Administration essentially explaining the advance. Now it’s become clear that the $10,000 advance is based on the number of employees as of January 31, 2020. So, $1,000 per employee up to $10,000,” Freeman said.
This will impact those companies with fewer than 10 employees who had hoped to receive the full $10,000 advance.
In an e-mail some applicants received, the SBA said this is to ensure that the greatest number of applicants can receive assistance during this challenging time.