The Small Business Administration’s Economic Injury Disaster Loan (EIDL) grant and loan program is still available.
Gig workers, independent contractors, freelancers, and those with side hustles are eligible to receive a $1,000 grant that does not have to be repaid. Up to $10,000 is available in grant money depending on how many employees you have. Here is how it works:
- 1 employee (you) = $1,000.
- 2 employees (you and someone else) = $2,000.
- 3 employees = $3,000 and so on; up 10 to employees.
Plus, if you qualify you can receive an SBA loan up to $150,000. But you don’t have to qualify for the loan in order to receive the free grant money.
About the Economic Injury Disaster Loan (EIDL) grant and loan program
As a response to the coronavirus, the CARES Act was passed in March 2020 to address the economic fallout experienced by American workers, families, small businesses. The Economic Injury Disaster Loan (EIDL) grant and loan program is part of the CARES Act.
Under the CARES Act freelancers, independent contractors, and gig workers affected by the coronavirus crisis are eligible to receive the grant. The SBA refers to these grants as “advances,” but you are not required to repay this money to the government.
The advance is designed to provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Recipients do not have to be approved for a loan in order to receive the grant advance.
If you are approved for a loan but are not interested, simply decline the loan offer. The grant money (advance) will still be deposited into your account.
EIDL Grant Money Eligibility
You must have been in business as of January 31, 2020. The grants are available until September 30, 2020, but you should apply as soon as possible because once the SBA money runs out – that’s it.
Where to apply for the SBA Grant
The application can be found at: covid19relief.sba.gov/#/.
You must provide direct deposit information
The SBA will direct deposit the grant directly into your bank account. If you have a debit card account with a routing and account number that should be okay to get the direct deposit also. If you don’t have a bank account here is a list of online bank accounts that will open a checking account instantly and give you an immediate routing and account number.
Tips to complete the EIDL application for independent contractors, freelancers, or gig workers
Question 1: Check the third box as you are applying as an independent contractor or sole proprietorship.
Question 2: Check all of the 6 boxes to verify you are eligible to apply.
Step 1 of 3: Business Information
The application will request the following information:
- Business Legal Name: If you operate under a different business name put that here. If not simply put your name here.
- Trade Name: If you operate under a different business name put that here. If not simply put your name here.
- EIN/SSN for Sole Proprietorship: You must add your Social Security Number (SSN) or Taxpayer Identification Number (TIN) if you are applying as an individual independent contractor, freelancer, or gig worker.
- Organization Type: You are either an independent contractor if you receive a 1099 or you are a sole proprietorship if you receive money from different customers/clients that don’t necessarily give you a 1099 form. If you are an S-Corp, C-Corp or LLC put that.
- Gross Revenues: This amount represents your earnings before you deduct your expenses.
- Cost of Goods Sold: This represents the costs of materials and production of the goods a business sells. For example: A retail shop can consider what it pays to buy the goods that it sells to customers. For people that drive for companies like Uber, Postmates or Instacart, gas can be considered the cost of goods sold.
- Primary Business Address: If separate from your home address put that, if not, use your home address.
- Business Email: Your business name or your name @
- Date Business Established: This is the date you started doing freelance, gig work, or independent contractor work. You can estimate if you don’t have the exact date but the date must be before January 31, 2020.
- Current Ownership Since: Most likely the same as the date your business was established. Must be before January 31, 2020.
- Business Activity: Choose the best category that applies. For example: If you own a daycare, educational services may be your best option.
- Detailed Business Activity: Choose the best category.
- Number of Employees (As of January 31, 2020): If it’s just you working, count yourself as 1 employee.
Step 2: Individual Owners
The application will request the following information:
- Is Your Business Owned by a Business Entity? No.
- Provide your information: Name, Mobile Number, Email Address, SSN, Birth Date, U.S. Citizen, Residential Address.
- Title/Office: Owner.
- Ownership Percent: 100%.
Step 3: Additional Information
The application will require you to answer the following questions:
- First three questions: Requests information about any criminal activity or felonies or suspension from receiving any federal grants or contracts.
- If anyone assisted you in completing this application: No.
Make sure you check the box that says: I would like to be considered for an advance of up to $10,000. This is the box where you are going to receive $1,000 per employee. You should expect to receive $1,000 since you are the only employee.
- Where to Send Funds: This is where you’ll fill out your bank account information where the $1,000 grant will be deposited. Be sure to enter the correct bank routing number and account number so your grant won’t be held up. If you don’t have a checking account, you can find one on this list of online bank accounts.
- Review and verify: The last step is to certify under penalty of perjury that all information is true and correct, review your information, and submit the application.
- Submit your application: Once the application is successfully submitted, the SBA will give you a confirmation number, so keep a copy of that for any follow-up.
The next step is to wait. There are no guarantees but the turnaround time in June was fairly quick. I have read people getting grant funds deposited in less than a week!
If your credit report is on freeze status, make sure your Experian report is unfrozen. Your credit is used to verify your identity along with considering you for a loan, even though you don’t have to take the loan if it’s offered.
Keep in mind the EIDL is a loan portion and a free $1000 portion. The application for the free grant money is for both the grant money advance and the loan.
You may also get offered a business loan – It’s just an offer. You can decline the loan offer and still get the grant money. The grant money is completely free and does not have to be repaid.
The EIDL application can be found at: covid19relief.sba.gov/#/.
