A step by step guide on how to complete the SBA EIDL loan and grant application if your are self employed, independent contractor, or sole proprietor.
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This video is intended for education purposes and should not be taken as legal or tax advice. You should consult with your financial professionals about your unique financial situation before acting on anything discussed in these videos. Freedomtax Accounting and Multiservices Inc. is providing educational content to help small business owners become more aware of certain issues and topics, but we cannot give blanket advice to a broad audience. Freedomtax Accounting and Multiservices Inc. or its members cannot be held liable for any use or misuse of this content.
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Link to EIDL Application - [ Ссылка ]
Economic Injury Disaster Loan (EIDL):
Low-interest (3.75% / 2.75% nfp)
long-term 5 to 30 years.
loans for working capital.
must have suffered substantial economic injury as a result of the COVID-19 pandemic.
Tax Information: 1040 Schedule C
Payroll Type: Cash Draw
Federal Assistance: Declared Disaster Assistance
Payroll Costs: Net earnings from self-employment
Loan Type: SBA 7(b) EIDL Disaster Loan
Duplication of Benefits (DOB): 7(b) yes EIDL
Covered Period: January 31, 2020 and ending on December 31, 2020
Who's Eligible: Any individual who operates under a sole proprietorship, with or without employees, or as an independent contractor.
Eligible entities: Small business, private nonprofit organizations, and small agricultural cooperatives.
Credit Elsewhere: Waived all except must have been in business before January 31, 2020. (Does not effect most of you, no worries at this point.)
Approval and ability to repay for small dollar loans: With respect to a loan made under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) in response to COVID–19 during the covered period, the Administrator may;
approve an applicant based solely on the credit score of the applicant and shall not require an applicant to submit a tax return or a tax return transcript for such approval; or
use alternative appropriate methods to determine an applicant's ability to repay.
NOTE: Your ability to repay the loan is the only focus point you need to have at this time. You should be calculating loans for 15 to 30 years to reduce your monthly overhead. You also should put together a financial plan that can show your ability to repay. Forecast earnings, reduced spending, lower inventory etc.
Emergency grant: (Advance) $1,000 minimum per independent contractor operating as owners. (Names on the 1040 Schedule C)
Reported by members: "... $1000 deposit into my account... self employed and put 0 for employees..."
Usage of Emergency grant: (Advance)
paid sick leave when you are unable to work due to the direct effect of the COVID–19;
maintaining earnings draw, payroll during business disruptions or substantial slowdowns;
Increased costs to obtain materials unavailable from the applicant's original source due to interrupted supply chains;
rent or mortgage payments; and
repaying obligations that cannot be met due to revenue losses. (fixed debt)
Emergency grant repayment: (Advance) not required up to the amount of the advance only.
Emergency grant reduced in PPP unemployment grant: If you merge your EIDL (7b) into a PPP (7a) unemployment forgive loan the amount of your PPP will be reduced in the amount of your EIDL Emergency Grant.
First Payment: 12 months from disbursements of funds. This may be 2 6 month payment deferrals bundled.
Usage of Economic Injury Disaster Loan (EIDL):
These are working capital loans that may be used to pay,
fixed debts,
payroll,
accounts payable,
other bills that could have been paid had the disaster not occurred.
Usage Notes: Economic Injury Disaster Loans help owners stay afloat during the declared disaster and ready to hit the ground running when allowed to return to work. This loan, (EIDL) is not to be used to pay for retooling or for business expansion. You are advised to seek other funding for expansion and retooling to meet current market demands.
Research / Experience regarding ability to repay loan.
Credit History / Scores: noted 350 on up approved for $15,000 without checks for ability to repay. You must be very careful with loans that place you at risk of default. Talk to your loan officer about a 30 year payment plan.
