Updated on April 1, 2020  – Following the declaration of a national emergency to combat the Coronavirus (COVID-19) pandemic, the Small Business Administration (SBA) launched the  Economic Injury Disaster Loan Assistance (EIDL)  program for small business owners in all US states, Washington D.C., and other US territories. EIDL loans are now available. In addition to this loan the SBA is offering an immediate $10,000 advance (the  Emergency Economic Injury Grant ) within three days of applying for an EIDL. To access the advance, you must first apply for an EIDL and then request the advance. The advance does not need to be repaid.

On March 27th, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a stimulus bill that includes a loan program to keep small businesses afloat during mandated COVID-19-related closures. The CARES Act includes a  Paycheck Protection Program  (PPP) which authorizes up to $349 billion of federally guaranteed loans to qualifying small businesses. This new loan program is based on the architecture of the SBA’s existing 7(a) loan program and will make forgivable loans of up to $10 million available to qualifying small businesses.

Borrowers may apply for different SBA loans – PPP loans, EIDL loans, non-disaster SBA 7(a), 504 and microloans, and also receive investment capital from Small Business Investment Corporations (SBICs). However, you cannot use your PPP loan for the same purpose as your other SBA loan(s). If you accept the EIDL loan, and you subsequently qualify for the PPP loan, you can re-finance the EIDL loan with the PPP loan.

Loans are limited to one per Taxpayer Identification Number.

If you already have a traditional SBA 7(a), 504 or microloan (i.e. a non-disaster SBA loan), under the Small Business Debt Relief Program, the SBA will cover all payments on these SBA loans, including principal, interest, and fees, for six months.

The table below compares the terms of the EIDL and PPP loans:

Note  – This information is supplied to inform our clients and partners.  However, the exact terms of loans are determined solely by the lender(s) and we can make no representation as to the accuracy or completeness of any information contained herein.

If you need assistance applying for the Economic Injury Disaster Loan Assistance (EIDL) program or Paycheck Protection Program (PPP),  please contact us.

 
Sources:
https://disasterloan.sba.gov/
https://www.congress.gov/

 
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