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Economic Injury Disaster Loan vs. Paycheck Protection Program

Businesses can get both EIDL and PPP loans at the same time, but cannot use the funds for the same expenses/purposes. Businesses can apply for the EIDL loan now and the PPP loan when it becomes available. EIDL loans can be refinanced into a PPP loan. Loans are limited to one per Taxpayer Identification Number.

 

ECONOMIC INJURY DISASTER LOAN
PAYCHECK PROTECTION PROGRAM
WHICH IS RIGHT FOR ME?

Businesses needing an immediate injection of cash

Businesses that need funds not tied to retaining employees

Businesses who need funds that can be spent over a term longer than eight weeks

Businesses that have retained employees

Businesses that have laid off employees, but could bring some or all back before June 30, 2020, if they had the cash to do so

THE WOW FACTOR 

Include a $10,000 grant per applicant

Can be converted to a grant if used for allowed expenses.

LOAN AMOUNT

Up to $2 million

Applicants may request an advance of up to $10,000, which will be distributed within 3 days

Up to $10 million 

Calculated by multiplying 2.5 by average monthly payroll costs 

USE

Financial obligations and operating expenses that could have been met had the disaster not occurred including payroll, utilities, accounts payable and fixed debts including those incurred before covered period.

Payroll, group healthcare benefits, insurance premiums, rent, utilities, interest on mortgage or interest on any other debt incurred prior to Feb. 15
Loan forgiveness for qualified expenses during an 8-week period beginning on loan origination date

INTEREST RATE

3.75% for businesses
2.75% for non-profits

4% maximum

TERM

Up to 30 years

10 years

FIRST PAYMENT DUE

One year after the loan origination date (interest is accrued during the deferment)

At least six months after the loan origination date (interest is accrued during the deferment)

COLLATERAL

The SBA will place a UCC lien against the assets of the business

None

LOAN FORGIVENESS

No. Yes on first $10,000

Yes, based on maintaining average number of FTE

NEED TO FILE 2019 TAXES?

No. Businesses will be asked to provide the SBA access to historical tax returns

Will depend on lender

HOW LONG BEFORE APPROVAL?

2-3 weeks plus an additional 5 days for funding

Will depend on lender

APPLICATION OPEN?

Yes. There is no obligation to accept the loan if you qualify 

No. Banks will need at least two weeks to prepare their loan application process

WHO IS THE LENDER?

The Small Business Administration 

A bank that handles SBA 7(a) Loans, underwritten by the SBA

Who can apply?

Those in business before Jan. 31,2020, have fewer than 500 employees, sole proprietorships, independent contractors and non-profits

Businesses and entities must have been in operation on Feb. 15, 2020 and have 500 or fewer employees 

Sole-proprietors, contractors and non-profits