The actual law regarding the EIDL advance

H

henreeta

New member
I know there is a lot of speculation and opinion regarding the EIDL Advance - but the law is clear.

Go directly to the bill to find out the truth.

The applicant requests the grant and the amount. The administrator, in this case, the SBA issues the grant.

They DO NOT get to make the determination based on number of employees or anything other than the self certification required under this act.

Here are the grant provisions directly from the bill:

(e) Emergency Grant.—

(1) IN GENERAL.—During the covered period, an entity included for eligibility in subsection (b), including small business concerns, private nonprofit organizations, and small agricultural cooperatives, that applies for a loan under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) in response to COVID–19 may request that the Administrator provide an advance that is, subject to paragraph (3), in the amount requested by such applicant to such applicant within 3 days after the Administrator receives an application from such applicant.

(2) VERIFICATION.—Before disbursing amounts under this subsection, the Administrator shall verify that the applicant is an eligible entity by accepting a self-certification from the applicant under penalty of perjury pursuant to section 1746 of title 28 United States Code.

(3) AMOUNT.—The amount of an advance provided under this subsection shall be not more than $10,000.

(4) USE OF FUNDS.—An advance provided under this subsection may be used to address any allowable purpose for a loan made under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)), including—

(A) providing paid sick leave to employees unable to work due to the direct effect of the COVID–19;

(B) maintaining payroll to retain employees during business disruptions or substantial slowdowns;

(C) meeting increased costs to obtain materials unavailable from the applicant’s original source due to interrupted supply chains;

(D) making rent or mortgage payments; and

(E) repaying obligations that cannot be met due to revenue losses.

(5) REPAYMENT.—An applicant shall not be required to repay any amounts of an advance provided under this subsection, even if subsequently denied a loan under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)).

(6) UNEMPLOYMENT GRANT.—If an applicant that receives an advance under this subsection transfers into, or is approved for, the loan program under section 7(a) of the Small Business Act (15 U.S.C. 636(a)), the advance amount shall be reduced from the loan forgiveness amount for a loan for payroll costs made under such section 7(a).

(7) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to the Administration $10,000,000,000 to carry out this subsection.

(8) TERMINATION.—The authority to carry out grants under this subsection shall terminate on December 31, 2020.
 
@carlssonjeseth Because the SBA changed the rules regarding this grant. They cannot arbitrarily decide when these grants will be dispersed the bill specifically says three days. The SBA cannot decide how much of a grant to issue as the bill states clearly the applicant requests the amount. The SBA cannot base the grant on the number of employees a small business has, as there's no provision for that in this law. People should be aware of what the law says and how it applies to them above any opinions and speculation.
 
@henreeta But like I said above, the law says 3 days after they receive an application. We don't know how they define receiving an application.
 
@carlssonjeseth I disagree, I think a lot of people posting have not read the actual law. Especially with the assumption that the 3 day count starts the moment you smash the submit button.

It says "...within 3 days after the Administrator receives an application from such applicant."

There very well may be a time delay between submitting an application and it being officially received. Business owners are making a lot of assumptions and going off of rumors. It would be super easy for the SBA to clarify all of this crap and cut down on their phone calls.
 
@kellyw The fact that the streamline 'application' is called an APPLICATION defeats this argument immediately. They have sent nothing out stating that there is an additional application. That is an assumption of yours not a directive that has actually been announced officially via the SBA.

There are many Senators that have been contacted that agree that the 3 days was from the submission of the streamline application.

This is not the only problem though. SBA is also adding thier own means test for who gets the advance and for how much. THIS is definitely against the CARES Act. Senator Hassan's office wholeheartedly agrees that the SBA would be mishandling the grants if they disbursed based on # of employees.

They are in communication with senior officials and have advised they should get back to me today with further information. The representative I spoke with advise that this issue has been flagged with Hassan's highest officials.

As for the 'Administrator' par of the law. This is just standard legal speak for the SBA being in receipt. All SBA employees work on the behalf of the SBA Administror. He/she does not need to personally have the application in hand for it to be considered 'received successfully'. The SBA themselves put up the streamline application. The Administrator is very well aware of the streamline application. So, yes as soon as you hit that submit button the clock started.
 
@henreeta Heres the sticky part

"may request that the Administrator provide an advance that is, subject to paragraph (3), in the amount requested by such applicant to such applicant within 3 days after the Administrator receives an application from such applicant."

It says "may request" but not "shall issue" So we have all "requested" it within 3 days. But nothing says they "must" honor that request.
 
@mxkris in a database to be accepted. theres a video with someone from the SBA answsering questions and he explains the process. The form we fill out isnt the application, its a preapplication, when someone finally gets to your pre app they have to enter all that info into the system and submit it . this way im assuming you cant just submit 100 of them and get 10k automatically.
 
@livelovelaugh17 The process they outline is the tail end of the application process for the loan portion.

This is not at all how the grant/advance is suppose to work.

The only requirement the CARES Act has is that you need to 1) submit an application and yes what we submitted IS an application regardless of the additional steps that might need to be take down the road. It even calls itself an application. 2) we need to self certify under penalty of perjury that we have been affect by COVID19 in some way financially. This part was done during the streamline application.

The fact that the streamline 'application' is called an APPLICATION defeats this argument immediately. They have sent nothing out stating that there is an additional application that needs to be completed first to get the grant/advance. (This is based on the new streamline app that started the evening of 5/29).

There are many Senators that have been contacted that agree that the 3 days was from the submission of the streamline application.

This is not the only problem though. SBA is also adding thier own means test for who gets the advance and for how much. THIS is definitely against the CARES Act. Senator Hassan's office wholeheartedly agrees that the SBA would be mishandling the grants if they disbursed based on # of employees.

They are in communication with senior officials and have advised they should get back to me today with further information. The representative I spoke with advise that this issue has been flagged with Hassan's highest officials.

As for the 'Administrator' par of the law. This is just standard legal speak for the SBA being in receipt. All SBA employees work on the behalf of the SBA Administror. He/she does not need to personally have the application in hand for it to be considered 'received successfully'. The SBA themselves put up the streamline application. The Administrator is very well aware of the streamline application. So, yes as soon as you hit that submit button the clock started.
 
@amsterdum Your point? If you filled it out but aren't actually a business that per the 'self qualify under penalty of perjury' asks if you are, then you have commit perjury and risk legal recourse. That's a pretty hefty lie. Your file will eventually be seen and processed. At that point they can confirm if you should have gotten the grant. They can always refer you for investigation for fraud. That is the recourse to those who apply but don't qualify.

That being said there is also a much broader scope to what kind of entities are covered right now. So you many very well qualify now vs during normal times. This is all resolved with the first 2 questions they ask.
 
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