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: https://www.sba.gov/funding-programs/loans/paycheck-protection-program-ppp
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