PPP & EIDL (Round 2)

The CARES Act created two unprecedented business stimulus programs to aid with the shutdowns caused by state responses to the COVID-19 pandemic. While riddled with rollout issues, misunderstandings, and countless revisions, these programs helped lessen the blow for many businesses across the country.

These programs ended in June, and while it looked like the pandemic was going to relent for long enough for vaccines to rollout, that was not the case. Due to the second swell of cases and additional closures, Congress has passed a second stimulus bill that includes second rounds of both of these programs, and with it, most likely a smoother rollout than the first.


The Economic Injury Disaster Loans for COVID-19 had two parts to them according to the CARES Act.

  1. Advance Grant
  2. Loan

The grant advance was meant to give any applicant for an SBA loan a $10,000 advance on that loan, which did not have to be paid back under any circumstance other than fraud.

Due to limited funds the SBA determined that each applicant would receive $1,000 per employee, up to $10,000 in advance money, instead of the full $10,000. While this stretched the funds out to reach more companies, many felt short changed, especially the many small businesses whose only employee is the owner.

It appears that the new stimulus bill is saying that Congress originally intended for all EIDL loan applicants that requested a loan advance were supposed to receive $10,000 no matter how many employees they had. Those that received advance amounts in the first round of EIDL advances should be receiving an email from the SBA and may be eligible for the difference between what they received and the $10,000 cap stated in the CARES Act.*

Those who did not qualify for the first round of EIDL may be able to apply for an advance similar to the original CARES Act. However, there are additional requirements that companies will have to fall under. Companies must:

  • Be located in a low-income community (we are unsure if Wrangell/Petersburg qualifies at this time
  • Have an economic loss of 30% or more
  • Did not receive EIDL 1 advance amount


The Paycheck Protection Program is open to all of those business that qualify, whether or not they received money from the PPP1 program. Those that did not receive PPP1 money will have less strict requirements than those that did. If your business is applying for a second PPP loan you must have:

  • A reduction in gross revenue of 25% or more for any quarter in 2020 compared with the same quarter in 2019.
  • Spent all PPP1 money
  • Fewer than 300 employees

For those of you that have had your PPP loan forgiven, or in the process, will know that the EIDL advance reduced the forgiveness amount that you have/will have received. This has changed and the SBA will be issuing guidance to resolve these issues and make sure that borrowers receive the full loan forgiveness that they are due.

Final Thoughts

This is a lot of information, if you have additional questions please reach out to us through facebook, twitter, email, or our contact form and we will get back to you as soon as possible.

*This is our current understanding of the bill that was recently signed. The SBA’s interpretation may be different, we will try and update you if our opinion changes or the SBA releases guidance.

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