Small businesses can get a second PPP but not this popular Covid-era loan

  • A $900 billion Covid relief law passed last month doesn’t let small businesses take a second Economic Injury Disaster Loan.
  • However, the law lets some hard-hit companies get a second grant, called a Targeted EIDL Advance.
  • A second Paycheck Protection Program loan funding round opened this week through community lenders.



Jovita Carranza wearing a suit and tie: Jovita Carranza, administrator of the U.S. Small Business Administration, testifies at a Senate Small Business and Entrepreneurship Committee hearing on June 10, 2020 in Washington.


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Jovita Carranza, administrator of the U.S. Small Business Administration, testifies at a Senate Small Business and Entrepreneurship Committee hearing on June 10, 2020 in Washington.

Small businesses that took a hit from the coronavirus pandemic will be able to draw a second Paycheck Protection Program loan. But the same isn’t true for another popular Covid-era funding source for entrepreneurs.

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The Economic Injury Disaster Loan program offers 30-year fixed-rate loans that provide six months of capital to small businesses during the pandemic, to cover things like rent, utilities, debt payments or a continuation of health-care benefits.

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The Small Business Administration, which oversees the program, has issued more than 3.6 million disaster loans during the pandemic worth a total of $194 billion, according to federal data through November.

But business owners can’t draw a second EIDL loan, according to Tiffani Clements, a spokeswoman for the SBA.

Second EIDL grants

That may confuse business owners, since the $900 billion Covid relief package passed last month allows some companies to get a second EIDL grant.

Those grants were a new facet of the disaster loan program, which was available pre-Covid to cover revenue shortfalls because of hurricanes and other events. (The federal government broadened availability to businesses nationwide due to the pandemic.)

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The CARES Act allowed entrepreneurs to apply for up to $10,000 in grant money, via an EIDL Advance, which didn’t have to be repaid. The grant size was based on how many workers a business employed.

Now, business owners can get another grant. Lawmakers also lifted the size restriction. Eligible entrepreneurs will receive the difference between $10,000 and their first grant allowance. (First-time applicants would be eligible for $10,000.)

Applications for a second grant — a Targeted EIDL Advance — will become available in coming days, Clements said. The relief law allocated $20 billion for the measure.



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The first $20 billion of grant money through the CARES Act ran out by July. Nearly 6 million businesses got funding.

Hard-hit entrepreneurs may be frustrated by the inability to draw a second EIDL loan. Many may need additional funding to survive until a Covid vaccine is broadly distributed and the economy rebounds.

Revenue among small businesses fell by nearly a third and 30% of small businesses shuttered last year, according to Opportunity Insights.

“They’re hurting badly,” President-elect Joe Biden said in a Thursday night speech outlining a $1.9 trillion relief package, the American Rescue Plan, which would provide additional grant funding to small businesses.

Lower-income communities

EIDL grants will only be available to businesses in low-income communities whose revenue dropped at least 30% over any eight-week period since early March (relative to the same time in 2019).

A focus on businesses located in less wealthy neighborhoods meshes with that of new PPP funding.

That pandemic-era forgivable loan program reopened to applicants Monday through some community lenders, which focus on underserved borrowers.



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“What [lawmakers are] trying to do with PPP round two and the EIDL grant is get money to these minority-owned small businesses that kind of got pushed out of the way in the first round,” said Brooke Lively, president of Cathedral Capital, which does financial work for small business clients.

Federal lawmakers are applying the same metrics as those for a New Markets Tax Credit to determine what constitutes “low income.” The law defines such a disadvantaged area as one in which the poverty rate is above 20%, though other measures may apply, too.

PPP loans

PPP applicants can get a maximum loan of $2 million in the second funding round. They must have 300 or fewer employees and a 25% revenue loss (during any quarter of 2020 versus the same prior-year period) to be eligible.

The relief law also scraps an earlier CARES Act requirement that EIDL grants be deducted from the forgivable amount of a PPP loan.  

Shuttered Venue Operators Grant

A separate grant, the Shuttered Venue Operators Grant program, will open to applicants in coming days, too, Clements said.

The federal government is allocating $15 billion for live venue operators or promoters, museums, movie theaters, theatrical producers and live performing arts venues that lost 25% in revenue due to the Covid downturn.

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Companies can get initial grants of up to $10 million, and supplemental grants up to half that amount.

The program will first open to businesses that lost 90% or more of their revenue.

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