This is probably a bad day to post this, but this is not an April fool’s joke. This post is 100% factual and possibly the most important post I have ever made.
Update on April 21: The EIDL program is no longer accepting new applications. For those who applied may get $1000 even if they claimed 0 employees for their business. Read the status update below for more information.
For those looking for a status update on the EIDL Emergency Grant, check out my post below:
Lyft and Uber drivers can get a Federal $10000 Emergency Grant from the Economic Injury Disaster Loan Program (EIDL). It is a grant and not a loan and does not need to be paid back. (References and links below) I personally have applied for it as I have multiple business ventures. Unfortunately I can only apply once for it as all of my business income is on one tax return.
The EIDL program, along with the loan advance (that does not need to be paid back) is part of the recent stimulus package that was passed by Congress. The stimulus package also removed a few requirements and also included independent contractors, such as Lyft drivers, Uber drivers, Instacart Shoppers, Doordash Dashers, Postmates drivers, and Amazon Flex drivers.
You can apply for the SBA EIDL and the $10000 Emergency grant on the SBA website below:
https://covid19relief.sba.gov/#
When I first read this, I thought it was too good to be true. However, this is 100% real. There is a list of qualifiers but here is the list of entities who can apply for this grant:
- Business entities with 500 or fewer employees:
- Sole proprietorships, with or without employees
- Independent contractors
- Cooperatives and employee owned businesses
- Tribal small businesses
- Private non-profits of any size.
Note that you must have been in business as of January 31, 2020. This is extremely generous as they are waiving the requirement that you need to be in business for at least one year.
This $10000 emergency grant is a $10000 loan advance on the EIDL that does not need to be paid back and it will be deposited it within three days. The grant is paid out as long as you are one of the above entities. You get the grant regardless of whether you are approved or rejected for an EIDL, which is insane.
References:
Below is the section in the SBA (small business association) website that calls out the emergency grant
https://www.sba.gov/disaster-assistance/coronavirus-covid-19#section-header-3
Below is the summary of EIDL and emergency grant and clarifies that it is a grant and it does not need to be paid back under any circumstances, even if your loan application is denied.
Below is a great post that best summarizes the entire Small Business loan program. There are two different loans, one for payroll and another under EIDL:
$350 Billion for Small Businesses
There was $350 billion dollars set aside to help out small businesses as part of the stimulus plan called the CARES act (Coronavirus Aid, Relief, and Economic Security). This funding is for the EIDL program and also the above mentioned Payroll protection program to help business pay their workers who are not employed.
As an update, the Treasury Secretary Steve Mnunchin clarified that the demand for small business aid may be more than $350 billion dollars but he will go to Congress to get more money if needed. There should not be any worry that the EIDL will run out of money, but I would recommend you apply as soon as possible so you can get your money sooner.
2020 CARES Act
As part of the CARES act, the House bill authorized emergency grants under the EIDL for payments up to $10,000. However, there is no guidance on how the amount is determined, so it is generally accepted that the advance is $10,000. It is in CARES Act subsection 1110, subsection E under “Emergency Grants.”
Application Process
You will need to apply for an EIDL first and there is a prompt towards the end to get the $10000 loan advance that does not need to be paid back. The entire application takes 5 minutes at most since they completely changed the application process Sunday. The original EIDL application takes up to 2 hours and you need to upload documents. This new application is only four pages and there is no requirement or option to upload supporting documents. As a reminder, you could be denied the loan and still get the $10,000 loan advance that does not need to be paid back.
https://covid19relief.sba.gov/#/
Page One (Eligible Entity Verification)
Ensure to read this first page. There are some additional qualifications for the loan and grant that won’t apply to most Lyft drivers and Uber drivers:
Page Two (Business Information)
For this page, you can use your legal name as your business name and trade name as you are considered a sole proprietor. For EIN/SSN, put your social security number if you are only an independent contractor. In organization type, click independent (short for independent contractor). List your gross revenues as your gross earnings last year. Cost of goods sold should be 0, unless you also have a business where you sell items like a store or online.
For business activity, select Transportation. This will apply for Lyft drivers, Uber drivers, and delivery drivers (Instacart, Doordash, Postmates, Amazon, Uber eats). For detailed business activity, select Limousine and Transportation.
Page Three (Business Owner information)
Put in your personal details, including your social security number.
Page Four (Additional Information)
There are a few more qualifiers for the application. The most important part of this page is the loan advance. Click that button and then enter in your bank information. Check the last box saying that you agree to the above terms.
As a reminder, please read the qualifiers and make sure you don’t lie on this form as there could be legal consequences (perjury) if you knowingly fill out false information.
Page Five (Summary)
Below is just a summary of all your information. Click the submit button to submit your application.
That’s it! I applied yesterday so I haven’t received my money yet and I’m also waiting to hear about my EIDL. The loan terms is very attractive, especially since you do not need to guarantee the loan in any way for loan amounts below $200,000. It will probably be a few weeks before I hear back from a loan officer.
I wouldn’t recommend any Uber driver or Lyft driver to take out a loan but I would be taking out a loan in case I need the money in the future for other investments.
Unemployment
I would still suggest Uber drivers and Lyft drivers to apply for unemployment in addition to this. See this post for more information about unemployment for Uber drivers and Lyft drivers:
- New Uber Drivers will get up to a $800 bonus after signing up: Sign up for Uber.
- New Lyft Drivers will get up to $800 if you sign up here using this link.