Following the government’s declaration of a national emergency to combat the Coronavirus (COVID-19) pandemic, the Small Business Administration (SBA) is offering solutions to help small businesses in all US states, Washington D.C. and other US territories cope with the impact. The Economic Injury Disaster Loan Assistance (EIDL) program and the Paycheck Protection Program (PPP).The EIDL offers loans up to $2 Million with access to a $10,000 advance (the Emergency Economic Injury Grant) within three days of applying for an EIDL. The advance is available once you have applied for an EIDL but must be requested and does not need to be repaid.The PPP went into effect on March 27, 2020 when President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The stimulus bill includes a loan program to aid small businesses during mandated COVID-19 closures which authorizes up to $349 billion of federally guaranteed loans to qualifying small businesses. This new loan is based on the SBA’s current 7(a) loan program and will make forgivable loans of up to $10 million available to businesses that qualify.Small businesses are not limited to only one of the SBA loan programs. Borrowers may apply for both the EIDL and PPP loans however, the PPP loan cannot be used for the same purpose as the other SBA loan(s). If you have an EIDL loan and then qualify for the PPP loan, you have the option of re-financing the EIDL loan under the PPP in order to take advantage of the PPP’s loan forgiveness provisions.Let’s look at a side by side comparison of the two programs.EIDL (SBA 7b)PPP (SBA 7a)What is the covered period?
Who is eligible to apply?
What is the maximum loan amount?
What is the interest rate of the loan?
What is the loan term?
What sort of collateral or personal guarantee are required?
How can the loan be used?
How do I apply?
If you have any questions regarding, or are interested in applying for, the Economic Injury Disaster Loan Assistance (EIDL) program or the Paycheck Protection Program (PPP), please schedule a consultation. We would be happy to assist you with the process.