Pedestrian traffic is slowly returning to Brattle Street and Harvard Square in Cambridge, Massachusetts, but small local businesses still suffer from prolonged blockage of the coronavirus.
Lane Turner / The Boston Globe via Getty Images
The EIDL Advance program, created by the CARES Act, awarded emergency grants to small businesses within three days of submitting their application.
Grants do not have to be paid, even if an EIDL loan application, which offers up to $ 150,000 in funding, was ultimately denied.
However, the grants were plagued by long delays and rule changes that frustrated entrepreneurs.
Some business owners took several weeks to get what was supposed to be quick cash. The SBA also limited the amount of funds to $ 1,000 per employee, diverging from the CARES Act’s original intention to pay any amount requested by a business owner up to $ 10,000.
Nearly 6 million companies received funds through the EIDL Advance program, according to the SBA.
Relief is over
However, companies are still struggling, and many have already exhausted other sources of aid.
The Paycheck Protection Program, also created by the CARES Act, offers small businesses low-interest loans that are converted into grants if the funds are used primarily for payroll costs, among other parameters.
However, more than half, 56%, of APP borrowers have spent their loan financing, and the remaining 44% are likely not far behind, according to a recent survey by the National Federation of Independent Business, a trade group .
Businesses that received a loan cannot apply for a second round of financing, without the additional intervention of lawmakers. Companies that have not yet obtained a PPP loan can apply until August 8.
However, many small businesses are still struggling. Of those who applied for a PPP loan, a disaster loan, or both, 46% expect to need additional financial support over the next 12 months, according to the federation.
Some states, including California, Nevada, and Texas, and cities like Atlanta have re-imposed some business closings to contain the growing coronavirus infections.