The COVID-19 pandemic has put many small businesses at risk, with many staring at the risk of bankruptcy. It is for this reason that the CARES Act was signed into law on the 27th of March. The law offers several safety nets for businesses of all sizes, and small businesses were allocated $370 billion. A small business can apply for the money under the Emergency Economic Injury Disaster Loan (EIDL). A good tax attorney should take you through the process of applying for this money, and quickly. If you live in Long Island, you can contact Alizio Law PLLC. This Long Island Tax Attorney specialized in all issues related to finance and accounting that small businesses have to deal with regularly.
However, even as you seek legal help on getting this cash, there is widely available information that you can learn, and expedite the process of receiving the grant money. Below are some of the things you need to know about the Emergency Economic Injury Disaster Loan (EIDL) grant.
Eligibility for the grant
The grant runs up to a maximum of $10,000, and any business that is categorized as a sole proprietorship, cooperative, or an independent contractor and has less than 500 employees is eligible. On top of that, for a business to apply for this money, they need to present their credit score or an alternative method that can be used to determine their ability to repay. The application process also requires that for a business to access the advance of up to $10,000, they need to first apply for an EIDL. This loan has a maximum of $2,000,000 and comes at an interest of 3.75%. It is also notable that the grant is covered for 31st January 2020 to December 31st, 2020.
Expenses eligible for grant
Another thing that the applicant needs to be aware of is the expenses that are eligible for the grant. For a business to be eligible for the grant, it needs to use the money for paid sick leave to employees that can’t work due to COVID-19. The business also needs to maintain its payroll during the COVID-19 shutdown period. A business can also use the money to meet any cost increments arising from a disruption in the supply chain. A business can also use the money to pay rent or mortgages that have been disrupted by the pandemic. Lastly, a business can use the money to meet other financial obligations that it may fail to meet due to the disruption caused by COVID-19.
To qualify for the grant, you need to show documentation indicating gross revenues for goods sold, 12 months before January 31st, 2020. One also needs to present the corporate name, social security number, identification number, date when the business was opened, and the number of employees the business had as of January 31st, 2020.
It is also important to note that once you get the grant, you will not be required to repay it.