Covid Stimulus Watch Adds $60 Billion in Economic Injury Disaster Loans

By Mellissa Chang
July 29, 2020

By Mellissa Chang

Covid Stimulus Watch now contains award information for almost 400,000 Economic Injury Disaster Loan (EIDL) payments from the CARES Act, amounting to more than $60 billion in loans. To date, the Small Business Administration has approved approximately $164 billion in EIDL loans, roughly half of its $360 billion allocation, to almost 3 million business. Of these loans, 80% were less than $150,000 and the average loan amount was just over $62,000.

Due to the high volume of loans and the relatively small size of most loan amounts, the Covid Stimulus Watch database only includes EIDL loans of $150,000 or more. Of these loans, entries with redacted recipient information were removed from our data set. We also decided not to post the data released by SBA on the emergency advance grants of up to $10,000 EIDL that applicants were given.

With the addition of the larger EIDL loans, Covid Stimulus Watch now contains more than 1 million grants and loans from 19 different CARES Act programs.

The EIDL program, like the Payroll Protection Program (PPP), provided billions of dollars in funding for small businesses impacted by the Covid-19 pandemic. The program, originally designed to provide long-term support to businesses affected by natural disasters, was greatly expanded through the CARES Act and made available at the national level for the first time.

Under the EIDL program, businesses, non-profits, and some agricultural operations, were originally eligible for up to $2 million in loans and $10,000 in emergency advances. In May, the SBA capped loans at $150,000 over funding concerns, and money for emergency advances were depleted for a second time in early July. EIDL loans are not forgivable and must be repaid while EIDL emergency advances are essentially grants and do not require repayment, even if a business is subsequently denied an EIDL loan.

As of July 15, 2020, the EIDL program had distributed all $20 billion of its emergency advances to approximately 5.7 million businesses and approved over $164 billion in loans to 3 million businesses. These grants and loans are provided directly by the government, whereas PPP loans are serviced by private banks.

Although business can receive larger loans through the PPP program, the funds from the EIDL program can be used for a broader range of expenses such as fixed debts, accounts payable, health care benefits, and other operating expenses. Good Jobs First is in the process of analyzing the EIDL data to see how many recipients also got PPP assistance.

It is concerning to see how quickly the PPP program and EIDL burned through funds. PPP loans and EIDL advance funds ran out well before anticipated and received additional funding as a result. However, EIDL emergency advance funds have been exhausted again and less than half of replenished PPP funds remain.

Additionally, the SBA stated that it would have run out of money for EIDL loans had loan maximums not been reduced by 90% to $150,000. This decision was not announced publicly and applicants were not warned or informed of the change, leaving businesses that applied after the cap at a significant disadvantage compared to those that applied earlier.

These issues underscore the need for closer oversight of the numerous CARES Act programs, increased transparency and communication with the public, and more coordination among federal agencies in addressing the economic fallout of this pandemic.