Washington, DC—Today, Congressman John Curtis (R-UT) and Congressman Joe Neguse (D-CO) introduced the EIDL Forgiveness Act, bipartisan legislation that would exclude the Economic Injury Disaster Loan (EIDL) Advance grant when determining forgiveness for a Paycheck Protection Program (PPP) loan. The legislation clarifies that businesses that received both a PPP loan and an EIDL Advance grant can still receive full PPP loan forgiveness, regardless of benefitting from each program.
“The COVID-19 pandemic continues to disrupt the lives of hard-working Utahns across the state,” said Curtis.“This is especially the case for the countless small businesses that are the foundation of Utah’s economy. The Economic Injury Disaster Loan Forgiveness Act is a perfect example of how we can find pragmatic, bipartisan solutions to help small businesses across the country overcome the current set of circumstances and continue serving their communities without further interruption.”
“Small businesses are the backbone of Colorado’s economy, and for many of them, PPP loans and EIDL Advances have been their only lifelines,” said Neguse.“The bipartisan EIDL Forgiveness Act provides some relief to struggling small businesses when they need it most by helping them save thousands of dollars, allowing them to focus their limited resources on keeping their employees on the payrolls and their doors open.”
Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, businesses could apply for a fully-forgivable Paycheck Protection Program loan and an Economic Injury Disaster Loan Advanced grant. The CARES Act created the EIDL Advance grant in order to provide immediate cash assistance of up to $10,000 to businesses effected by the pandemic.
Citing federal guidance published after the CARES Act became law, PPP borrowers continue to experience challenges in receiving full loan forgiveness because they leveraged both relief programs. This, despite there being no clear prohibitions from doing so outlined in statute and absent a clear requirement for businesses to repay the EIDL Advance grants. The EIDL Forgiveness Act clarifies Congress’ original intent by excluding the amount in an EIDL Advance grant a business receives from their PPP loan forgiveness calculation, therefore helping businesses preserve the resources critical to their recovery from the COVID-19 pandemic.
Click HERE to read the text of the bill.