EIDL Regular vs Loan Advance

[Gretel]

I never had to deal with SBA loans, I now have applied for the loan advance for one of my clients. Here is what I need help with understanding: There doesn't seems to be any place on the SBA website to actually apply for an EIDL loan, it only directs to the Advance. As the word "advance" entails: There must be a loan associated with it. How? Thanks,

[TaxGuyBill]

I haven't gone through it yet, but your thought is interesting. Isn't the application process part of the actual 'loan'?

Does it give you an option for borrowing more money? If so, then the money they give you is just an 'advance'.

It will be interesting to see how all of this turns out.

[Gretel]

Very interesting and no, there was place for a loan amount. My only conclusion was that this will happen upon approval of the Advance since I did not see any alternative.

[ATSMAN]

I have 2 clients that applied for the $10K Grant and they had to apply through the SBA site for a Loan first and then the $10K is released if they qualify. Approval of the loan amount is not necessary. In other words you just can't apply for the $10K grant only.

[Gretel]

Thank you so much. This is the only thing that makes sense. However, only the advance application comes up. There is another EIDL application available for regular disasters with area's listed that qualify but this is not Coronavirus areas. Did they use that application? Would you mind finding out?
Thanks,

[WICPA]

You used the correct application. SBA will contact the client regarding the loan and how much they may be qualified for. I know the system has been bogged down by all the people thinking they could apply and get instant $10K. One of my clients who applied early did speak with an SBA rep and were told to estimate their needs for the loan and it would be processed. What was supposed to happen in a few days now looks like it will take a few weeks.

[kathyc2]

My understanding is the loans need to go through a bank. Are you saying it doesn't?

[TaxGuyBill]

My understanding is the loans need to go through a bank. Are you saying it doesn't?

The PPP needs to be done directly with a bank.

From what I understand, the EID starts off with the SBA, but after that, I'm not sure. The title of the Application on the SBA website is called "COVID-19 ECONOMIC INJURY DISASTER LOAN APPLICATION", which seems to indicate that is the actual loan. But it seems that if there is an actual loan given (besides the $1000/$10,000 Advance payment/grant), that the SBA passes that off to a bank.

[Burke]

There was an interview with someone this morning on the radio, which indicated these applications have to be tendered to the bank, then the bank has to review. If everything is okay, they send to SBA, who authorizes loan and sends money to bank. Bank then lends money to taxpayer. Sounds like it is a process that will take weeks -- and that is IF they don't have to go back to taxpayer for more information!

[TaxGuyBill]

There was an interview with someone this morning on the radio, which indicated these applications have to be tendered to the bank, then the bank has to review. If everything is okay, they send to SBA, who authorizes loan and sends money to bank. Bank then lends money to taxpayer. Sounds like it is a process that will take weeks -- and that is IF they don't have to go back to taxpayer for more information!

Most loans take some time. So I think that is why this EID thingy is called an "Advance". And even if you don't end up with a loan, you get to keep this "Advance".

One article that I read says that even though they call this a "loan" and "advance", the law is written in a way that treats it as a "grant".

[sami]

I did EIDL grant of $10,000 for some of my clients and you go thru SBA.gov website. The PPP loan or $100K forgiveness program you have to go thru your bank that client has business account with. The sad part is most banks are refusing to apply. Looks like bank just don't need the headache over 1% they will earn from client. I don't know of anyone how have received the 10K or received any notification for SBA yet. It was supposed to be 3 business days but some of my clients are waiting over 10 business days. It is first come basis. Their are several videos online by big CPA's that one can watch.

[Lion]

The banks get 5% from SBA and, if not forgiven, 1% from borrower. The rate was .5%, but the banks complained it was too low, so it settled at 1%.

[Toobusy]

It is there! I just applied for one about three days ago. Once there, look for Home Loans or Sole Proprietor Loans. You can also reach that application page by clicking on :Economic Injury Disaster Loan Assistance, then click Coronavirus related assistance. Although it says, :The loan advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application, and this loan advance will not have to be repaid," It been three days with me, and the only notice that I received from them is that is that my Application Submitted, and I will be notified through the email address I submitted." It has been three days.

[ATSMAN]

It been three days with me, and the only notice that I received from them is that is that my Application Submitted, and I will be notified through the email address I submitted." It has been three days.

That has been the experience of one of my clients who was actually able to get through and submit it online. If you call the SBA District office the phone just rings and then they hang up after the quick connect. No one live to speak to there. It is turning into a real ugly mess and the politicians are on TV saying it is going well.

[Gretel]

To clarify for those who responded to the $10,000 Advance EIDL: Did you, your client actually apply for a loan of a higher amount and if so, how?