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Covid-19 Emergency Disaster Loan (Grant)

By Brian Post, Education and Training Director.

Many small business owners and self employed people are scrambling to adjust right now.   Most wallers are in this category.  If you have your own business, or were paid as an independent contractor (got or will get a 1099 tax form), you most likely qualify for the Emergency Disaster Loan program that was part of the recent CARES act.

With this program you can apply for a “loan” and receive funds directly from the government through the Small Business Administration (SBA) without having to apply through a bank.

The truly exciting part of this program is that the first $10,000 of the ‘loan’ is forgiven.  Meaning that you will not have to pay it back.  They call this a $10k Advance.  Amounts larger than that are a loan and will have to be paid back.  Based on all the information I have seen to date, there is no reason to not apply for the $10,000.  You should apply for this ASAP as it is likely the program will run out of funding.  Possibly more funding will be approved.

The Link to apply for the SBA $10k advance:

The application takes 10 to 15 minutes.  For the application you will need:

  • Your contact info and legal business name if you have one.
  • Your EIN or SSN #
  • The date your business started
  • Your gross business income for Jan 31 2019, – Jan 31 2020.  (All the money your business made)
  • Your total Cost of Goods Sold for the same time period. (Total of all project materials, other direct project costs, etc).
  • Then finally you enter the information for the bank account where you would like the cash advance to go.
  • And that is about it.

FAQ (Based on the info I have seen to date):

How is the grant award amount determined?  To the best of my knowledge this is not clear at this time.  The only language I have seen is that it is based on the ability to repay, but since the $10k is not repaid this is of limited use.

If I apply for more than the $10k what is the interest rate?  This is also still a bit unclear to me.  I have heard that it will be .5%  however last I saw online it was listed at 2.75%

If the grant is awarded to me is it taxable income?  Yes.  Everything I have heard thus far is that it will be considered taxable income.

My business has not been greatly affected by Covid-19 thus far, should I still apply?  Yes.  Everything I have seen is that there are no drawbacks to applying.   To paraphrase Bernie Sanders:  This program was set up to help small businesses, it is your right as an American tax payer to apply for it, just as it is an employees right to apply for unemployment if they are furrowed or laid off.

When will the money come?  We don’t really know yet.  Supposedly it could be as fast as 3 days.  However, the system is overwhelmed.  My own application has been in for 7 days and I have not gotten any response or funds yet.


Other things to know:

For those of you with employees there is also the payroll protection program.  This is a more complex application and you need to work with your local bank.  However for anyone with employees you should look into this further.

SBA Payroll Protection Program loan application:

It is recommended that you get in touch ASAP with your lender. They may not have the details yet, or be able to accept the application, but let them know you’re planning on applying.

The CARES act also stipulated that unemployment benefits would be available to independent contractors.  If you build walls but don’t have a formal business set up you could be in this category.  However as far as I know there are no details about how eligibility or amounts will be determined.  It will likely vary state to state.   However for those in this category you should pay attention as things develop.  With the federal government pitching in $600 per week on top of state unemployment benefits it would be well worth those who qualify to apply.


I am not a financial advisor.  You should do some of your own research as well, and consult with your financial advisors or accountants.  There are doubtless many scams out there at this point.  The two links in this post are valid links (to the very best of my knowledge) to help for your company.  Pay attention to .gov links and other valid sites.  Not unknown or odd URLS.