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  • Writer's pictureGabriel Velez

SBA Loans: Paycheck Protection Program (PPP) vs. Economic Disaster Loan (EIDL) - COVID-19

SBA 7(a) Relief Loans (Paycheck Protection Program)

  • Our best advice at this time is to consult your banker first.

  • Loan amount up to $10,000,000

  • An interest rate of 1% and matures in 2 years. When the loan is initially issued it is automatically deferred (no payments) for 6 - 12 months.

  • Unsecured and no personal guarantee

  • Eligible for loan forgiveness provided you use 75% of the proceeds for qualified payroll costs and the other 25% for qualified other expenses (rent, utilities, insurance, etc.)

  • Relief loans are not eligible for business acquisition, real estate purchase, or other typical 7(a) proceeds, but may be eligible for business debt refi’s – stay tuned

  • Borrower SBA Guarantee Fee will be waived

  • No prepayment penalties

  • A borrower with a current EIDL loan can only also receive the SBA 7(a) Relief loan if the EIDL loan is unrelated to COVID-19. On the PPP loan application, there is also the opportunity to refinance your EIDL into the PPP.

  • More info:

Economic Injury Disaster Loan (EIDL)

  • Apply through the SBA (click here)

  • Loan amount up to $2,000,000

  • 3.75% interest rate for For-Profit companies

  • 2.75% interest rate for Not-For-Profit companies

  • Eligible for $10,000 advance/grant

  • Loan term not to exceed 30 years

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