EIDL, EIDG to PPP SBA Duplication of Benefits Calculation
RESEARCH DISCUSSION ONLY.
I have made "BOLD" what I would like you to focus on.
LOAN AUTHORIZATION AND AGREEMENT (LA&A)
Section: COMPENSATION FROM OTHER SOURCES
Eligibility for this disaster Loan is limited to disaster losses that are not compensated by other sources.
Other sources include but are not limited to:
proceeds of policies of insurance or other indemnifications,
grants or other reimbursement (including loans) from government agencies or private organizations,
claims for civil liability against other individuals, organizations or governmental entities, and
salvage (including any sale or re-use) of items of damaged property.
Borrower will promptly notify SBA of the existence and status of any claim or application for such other compensation, and of the receipt of any such compensation, and Borrower will promptly submit the proceeds of same (not exceeding the outstanding balance of this Loan) to SBA.
Borrower hereby assigns to SBA the proceeds of any such compensation from other sources and authorizes the payor of same to deliver said proceeds to SBA at such time and place as SBA shall designate.
SBA will in its sole discretion determine whether any such compensation from other sources is a duplication of benefits. SBA will use the proceeds of any such duplication to reduce the outstanding balance of this Loan, and Borrower agrees that such proceeds will not be applied in lieu of scheduled payments.
>>> END EIDL DOCUMENT <<<
>>> START PPP LOAN INFORMATION <<<
The CARES Act also provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the Paycheck Protection Program (PPP). The PPP is intended to provide economic relief to small businesses nationwide adversely impacted by the Coronavirus Disease 2019 (COVID-19).
SBA posted additional interim final rules on
April 3, 2020,
April 14, 2020,
April 24, 2020,
April 28, 2020,
April 30, 2020,
May 5, 2020,
May 8, 2020,
May 19, 2020
Department of the Treasury posted an additional interim final rule on
This interim final rule supplements the previously posted interim final rules.
PPP Borrower Application form SBA Form 2483 (04/20)
If Applicant is refinancing an Economic Injury Disaster Loan (EIDL): Add the outstanding amount of an EIDL made between January 31, 2020 and April 3, 2020, less the amount of any &ldquoadvance&rdquo under an EIDL COVID-19 loan, to Loan Request as indicated on the form.
April 24, 2020 PAYCHECK PROTECTION PROGRAM HOW TO CALCULATE MAXIMUM LOAN AMOUNTS &ndash BY BUSINESS TYPE
Step 4: Add the outstanding amount of any Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020 that you seek to refinance, less the amount of any advance under an EIDL COVID-19 loan (because it does not have to be repaid).
Paycheck Protection Program Loan Forgiveness Application
Page 1 SBA Form 3508 (05/20)
Page 2 SBA Form 3508 (05/20)
Line 11: Enter the smallest of lines 8, 9, or 10. Note: If applicable, SBA will deduct EIDL Advance Amounts from the forgiveness amount remitted to the Lender.
>>>> END PPP LOAN INFORMATION <<<<
>>> HR 748 CARES Act Publ: 116-136 <<<
(e) Emergency grant.&mdash
(1) IN GENERAL.&mdashDuring 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&ndash19 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.
(5) REPAYMENT.&mdashAn 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)).
>>> END HR 748 CARES Act PubLaw: 116-136 <<<
Opinion / Editorial:
At no time until 5-16-2020 does the SBA or any other agency from my research make public what will be considered a duplication of federal assistance.
The only document that references Section 312 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (P.L. 93-288) is the "LOAN AUTHORIZATION AND AGREEMENT (LA&A)" for the EIDL closing loan documents.
The rule requires federal agencies providing disaster assistance to ensure that individuals and businesses do not receive disaster assistance for losses for which they have already been compensated. Duplication of benefits occurs when compensation from multiple sources exceeds the need for a particular recovery purpose. Recipients are liable to the United States when the assistance duplicates benefits provided for the same purpose.
What the SBA is calling a duplication of benefits is your Grant Advance and they are deducting the advance amounts from your PPP loans if you accept the PPP loans and file the application for forgiveness.
At no time during the calculations process for the borrowers was there ever mention of any Repayment of the Emergency Grant. This in my opinion is not a duplication of benefits because for all the emergency grant as promised by law did not arrive 3 days after your application was filed. Just because the assistance has the same covered period doesn't make the assistance available to be used until the funds are actually disbursed.
The DOB in my opinion should only be counted if the Advance was disbursed 3 days from the borrowers EIDL application date and the PPP loan was disbursed on the same day.
This will end up to be an advocacy task to bring up to your congressional representatives. For the SBA to say your SBA Advance is a duplication for the SBA PPP loan as they make rule changes daily is not following the spirit of HR 748 the CARES Act. and I for one will be making my voice heard very loud once I make this data easy enough for most to read and understand.