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American Rescue Plan For Nonprofits Still Works

American Rescue Plan For Nonprofits Still Works

American Rescue Plan For Nonprofits – More Monies For Charities is INSIDE CHARITY’s update on what funds are still available from the Federal Government through the American Rescue Plan of 2021.

The EIDL program has been around for years, but in March of 2020 the SBA elected to expand the definition of eligible nonprofits to include those affected by the coronavirus pandemic. This allows charities who suffered from economic injury, such as a drop in revenue or an increase in expenses, to apply for low-interest loans. Additionally, the CARES Act implemented a first-time EIDL grant, which is available to all applying businesses even if they choose not to participate in the loan program. In the Coronavirus Response and Relief Package additional funds were set aside to extend the grant the program created by the CARES Act, as well as create a new program to nonprofits most affected, that are located in low-income communities.

American Rescue Plan For Nonprofits – More Monies For Charities

EIDL Loans

On December 30, 2020 the SBA announced that the deadline to apply for coronavirus-related EIDL loans will be extended through December 31, 2021.

You can apply for an EIDL loan directly with the SBA here.

On March 12, 2021 the SBA announced that all SBA disaster loans, including EIDL loans made in year 2020 will have the first payment due date extended by an additional 12 months, for a due date of 24 months from the date of the note. Additionally, SBA disaster loans, including EIDL loans made in year 2021 will have the first payment due date extended by an additional 6 months, for a due date of 18 months from the date of the note.

On March 24, 2021 the SBA announced that they’ll be increasing the EIDL loan limit to $500,000, up from $150,000. The change will be effective April 6, 2021, and will cover up to 24 months of sales, so a business that had $100,000 in sales and previously received $50,000 is now eligible to receive up to $200,000. On April 6, 2021 the SBA started the process of emailing EIDL loan recipients with information on how to request an increase under the new EIDL calculations. Unlike previously announced, an official increase request will be required to receive the increase, and unsecured personal guarantee will be required for loans over $200,000 from all 20% owners. No real estate collateral is required for loans under $500,000.

The SBA has now added the option of requesting an increase to most applicant’s online portals, which automates much of the process. You can still request an increase via email if you prefer:

  • Email [email protected]
  • Subject line: “EIDL Increase Request for [insert your 10-digit application number]”
    • Not to be confused with your loan number
  • In the body of your email include your application number, loan number, business name, business address, business owner name(s), and phone number.
  • Do not include any attachment’s in the email- the SBA will reach out if they require additional information or verification.

EIDL Targeted Grant

The EIDL Targeted Grant does not have a public application, instead applicants must first apply for a loan, and will then be invited to apply for the EIDL Targeted Grant. You can apply for the loan just to receive the Grant invite, without proceeding to accept the loan. The EIDL Targeted Grant program offers funds to businesses in low-income communities that suffered at least a 30% decline in gross receipts over 2 months. The application deadline for this program will be December 31, 2021.

On March 11, 2021 the American Rescue Plan was signed into law. The Act includes an additional $15 billion in funding for Targeted Grants, and creates the Supplemental Targeted EIDL Advance, a $5,000 grant for businesses with a 50% loss and less than 10 employees. See more on Supplemental Targeted Grants here.

Eligibility

  • Businesses including sole proprietors, independent contractors, and self-employed persons, as well as non-profit organizations.
    • Ineligible industries include those engaged in loan packaging, speculation, multi-sales distribution, gambling, and investment or lending.
    • Real estate investment firms are eligible if the real property is being held for investment purposes
  • Employ 300 or less employees
  • Been in operation as of  January 31, 2020
  • Be located in a designated low-income community
  • Show an economic loss of 30%+ in any 2 months between March 2, 2020 through the present, as compared to a comparable 2 months in 2019 or through March 2, 2020. Applicants will be asked to provide gross monthly revenues to confirm the 30% reduction.

Grant Calculation

  • Flat rate grants of $10k to eligible businesses
  • Businesses that previously received an EIDL grant will receive the difference between their grant received and $10k, regardless of the # of employees.
    • Example: Corporation A is located in a designated low-income community and previously received a $2k EIDL grant. Corporation A can now apply to receive an $8k grant.

Application Process

The SBA will be reaching out to notify all grant recipients that received grants of less than $10k, as well as all applicants who applied for a grant or loan after funding had been depleted, of their eligibility for this grant. Potentially eligible businesses are divided into three groups:

  1. Businesses that previously received an EIDL Advance of less than $10k: The first round of eligible businesses are those that previously received an EIDL grant, but did not receive the full $10,000 currently available. The SBA started the process of reaching out to these businesses on February 1, 2021.
  2. Businesses that applied for an EIDL loan before December 27, 2020 and did not receive any Advance: The second group of eligible businesses are those that applied for an EIDL loan before December 27, 2020, but after grant funding had depleted.
  3. Businesses that applied for an EIDL loan after December 27, 2020: Originally, the SBA has no plans to offer the Targeted Grant to this group, but the SBA opened the application process to this group in mid-June.

The SBA urges all businesses that have not yet filed a 2019 return to do so, as this will be required to receive the Targeted Grant. Additionally the SBA will request monthly gross sales for each month from January 2019 through the most recent month, to verify the 30% drop in sales that is needed to qualify.

The SBA expects to disburse funds to eligible applicants within 21 days of the application requirements being satisfied. The SBA has not been keeping to this timeline.

EIDL Targeted Grant FAQs

Application Steps

  1. If you’re part of an eligible group, you’ll receive an email from [email protected] with the subject SBA Application No. XXXXXXXXXX – Invitation to submit COVID-19 Targeted EIDL Advance application. Your email will include a dedicated link to your Targeted Advance application, where you’ll enter your SSN/EIN, certify some eligibility questions, and enter your sales for each month for 2019, 2020, and 2021 to date.
  2. After submitting your application you’ll receive a request from the SBA to give permission for them to pull your 2019 tax transcript from the IRS. This email request can take anywhere from a few hours to 2-3 weeks.
  3. After you give permission to the SBA to pull your tax transcript, log into your EIDL account, scroll down to the “Targeted Advance” section, and click on “Submit for Processing”- it’s not currently clear why this step is not automated by the SBA.

New Targeted Grant applications sent out after April 21, 2021 include an option to request the Supplemental Grant as well.

Appeals

While the SBA originally did not allow for an appeal process, they’ve denied many applications in error, and are now allowing those applications to appeal.

To appeal what you feel was a wrongful denial:

  • Email [email protected]
  • Subject line: “Reevaluation Request for [insert your 10-digit application number]”
    • This is should be your Targeted Advance application number
  • In the body of your email include your application number, business name, business address, business owner name(s), and phone number.
  • Include an explanation and any documentation that addresses the reason for the decline.

EIDL Supplemental Targeted Grant

On March 11, 2021 the American Rescue Plan was signed into law. The Act includes funds to create the Supplemental Targeted EIDL Advance, a $5,000 grant for businesses located in low-income communities that suffered a 50% decline in gross receipts over 2 months, and have 10 or fewer employees. To qualify a business must have already received the EIDL Targeted Grant- no application will be available, instead the SBA will reach out to EIDL Targeted applicants to inform them of next steps.  The maximum allowable grant from both programs combined is $15,000.

New Targeted Grant applications sent out after April 21, 2021 include an option to request the Supplemental Grant as well.

EIDL Grant Round 1 Changes

This section will be updated once the SBA releases further guidance and details.

  • There is indication that the SBA will reopen the EIDL Advance Grant program, which provides $1,000 per employee up to $10,000. At this time no further information is available.
  • EIDL grants received will not be required to be reported as income
  • Allows businesses to deduct expenses paid with EIDL grants, essentially creating a double-tax benefit
  • EIDL grants received will not reduce PPP forgiveness total

American Rescue Plan For Nonprofits – More Monies For Charities was first posted at INSIDE CHARITY.

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American Rescue Plan For Nonprofits – More Monies For Charities and other INSIDE CHARITY content and comments are for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. All content on this site is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing on this site constitutes professional and/or financial advice, nor does any information on the site constitute a comprehensive or complete statement of the matters discussed or the law relating thereto.

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