SBA Grant is financial assistance funded by the U.S. Government given to small business owners aiming to raise and centralize their businesses in the market.
This grant was supervised by the Small Business Administration (SBA) to look forward to the small enterprises that can be competitive with the big corporations in the industry of entrepreneurship and marketing.
This specific grant will serve as a huge help to small business owners as they will be capable of improving and innovating their respective products or enterprises.
COVID-19 EIDL - Economic Injury Disaster Loan
The SBA opened its COVID-19 Economic Injury Disaster Loan (EIDL) and EIDL Advance as the people demands it because of the economic loss in business industries brought by the pandemic. The said grant will be open for small business owners and non-profit organizations that suffer financial instability and assist them to recover.
The smaller incentives, which were originally given in late April, are for firms with less than 10 employees in low-income communities that lost more than 50% of revenue in the eight weeks following the outbreak compared to the previous year. A budding entrepreneur must apply for any or both grants to be accepted.
According to Small Business Administration (SBA) last July 15, only two-point four billion dollars of the thirty billion dollars that were set aside for $10,000 “targeted EIDL Advance” grants had been validated. In addition, only one billion dollars of the five billion dollars in “supplemental targeted advance” grants had been approved.
For instance, In Maryland, five thousand five hundred applicants gained forty-six million dollars in larger grants, while just over four thousand applicants received twenty point three million dollars in five thousand dollars grants.
Am I eligible for an SBA Grant?
The Small Business Administration (SBA) Grant is said to be for small business owners and non-profit organizations, however, not all of small business owners and non-profit organizations can be assisted by this grant. The Small Business Administration (SBA) released the qualifications for the SBA’s COVID-19 Economic Injury Disaster Loan (EIDL) and EIDL Advance.
In order to be eligible for the grant, the small enterprises should have an economic loss of at least 30% and be part of a low-income community with a total of 300 or fewer employees. Furthermore, the business should be under the CARES ACT.
In this act, the enterprise should be cooperative, ESOP Tribal concern, and not exceed the number of employees at 500 and a private non-prof. Also, the operator should be bound by sole proprietorship while the business should start its operation on January 31, 2020, and be immensely damaged by the pandemic.
Other Grants Offer from Small Business Administration
The Small Business Administration (SBA) Grant has various branches that offer financial guidance to small business owners.
- COVID-19 Relief Programs - This grant focuses on the businesses, nonprofits, and faith-based organizations that were affected by the pandemic intending to bring back their business.
- Exporting grants for state entities or State Trade Expansion Program (STEP) - This grant gives monetary assistance in order to guide small business owners in export development. STEP started in 2011 and already helped thousands of small enterprises.
Details of the SBA’s COVID-19 EIDL and Advance Grant
As the Small Business Administration (SBA) closed the program and reopened it again because of the continuous demand of small entrepreneurs, the details of the said grant are the following:
- The loans were approved by April 6, 2021, with 24 months of economic injury. Can loan up to half a million dollars. While the loan that we approved before April 6, 2021, that did not reach half a million dollars can increase.
- For the terms, it would last for 30 years with no prepayment penalties or fee
- For interest, three-point seventy-five percent was fixed for small businesses, enterprises and entrepreneurs. While two-point seventy-five was affixed for the non-profit organizations.
Requirements You Should Prepare
Here are the requirements that you should prepare upon applying
- Form 5
- IRS 45067
- Personal Financial Statement
- Schedule of Liabilities and Tax Returns
- Good email address and cellphone number
Steps for SBA Grant Application
Here are the steps you can follow:
- Access the Small Business Administration’s site covid19relief.sba.
- You can start the application process within the site.
- After processing the application, a link will be sent going to covid19relief1.sba.
- Go to the given site and create an account for you to finalize your application.
Tips for Applying for SBA Grant
- Be sure that you already have the said requirements for the application.
- Always monitor your business credit score and your issues.
- Do not duplicate your application
Frequently Asked Questions
What is an SBA Grant?
An SBA grant is a form of non-repayable funds provided by the Small Business Administration to support small businesses, usually with the aim of fostering economic development, innovation, and job creation.
Who is eligible for an SBA Grant?
Eligibility criteria may vary depending on the specific grant program, but typically, small businesses, nonprofits, and educational institutions are eligible. Most grants prioritize businesses owned by veterans, women, minorities, and those located in economically disadvantaged areas.
How can I apply for an SBA Grant?
Applications for SBA grants are usually done online through Grants.gov or the SBA’s official website. Applicants typically need to create an account, search for the relevant grant, and follow the application instructions provided.
Do I have to pay back an SBA Grant?
No, grants are forms of financial assistance that do not require repayment, as opposed to loans. However, grant recipients are typically required to meet specific conditions and reporting requirements.
Can startups apply for SBA Grants?
Some SBA grants are available to startups, particularly those involved in research and development, innovation, and technology. However, availability may be limited, and eligibility criteria can be strict.
How much money can I receive from an SBA Grant?
Grant amounts vary widely depending on the program and the specific needs of the applicant. Some grants may offer a few thousand dollars, while others might offer hundreds of thousands or even millions of dollars.
How long does it take to receive SBA Grant funds?
The time frame varies depending on the grant program and the completeness and quality of the application. Some grants have a quick turnaround time of a few weeks, while others might take several months.
Can I apply for multiple SBA Grants?
Yes, you can apply for multiple SBA grants as long as you meet the eligibility criteria for each grant. However, each grant program has its own rules and restrictions, so it is essential to review them carefully.
What can I use SBA Grant funds for?
The usage of grant funds depends on the specific grant program. Generally, funds should be used for purposes outlined in the grant proposal, such as business development, research and development, or job creation. Misuse of funds may lead to penalties.
What happens if I misuse SBA Grant funds?
Misusing grant funds can lead to severe consequences, including repayment of the funds, fines, and disqualification from future grant opportunities. It is crucial to adhere strictly to the terms and conditions of the grant award.
Are SBA Grants taxable?
SBA grants are typically considered taxable income, but there may be exceptions depending on how the funds are used. Consult with a tax professional or refer to IRS guidelines to determine your tax liability.
Can a non-US citizen apply for an SBA Grant?
Non-U.S. citizens may face limitations in applying for SBA grants. Generally, businesses must be based in the U.S., and owners must be U.S. citizens or legal residents. However, exceptions and specific eligibility criteria depend on the grant program.