Yesterday, Congress passed another stimulus package which includes replenishing the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL). DCA will be facilitating three webinars today, Friday, April 24th at 11 AM, 1 PM, and 4 PM.
Link to access:
• All three webinars are listed on the landing page. Once you click on a session, it takes you to the Zoom link and the contact information.
Session 1 – Friday, April 24, 11:00 am
Click to Join: https://zoom.us/j/95805208137
• US: +1 (646) 876-9923
• Webinar ID: 958 0520 8137
Session 2 – Friday, April 24, 1:00 pm
Click to join: https://zoom.us/j/92371170154
• +1 (312) 626-6799
• Webinar ID: 923 7117 0154
Session 3 – Friday, April 24, 4:00 pm
Click to Join: https://zoom.us/j/91691656774
+1 (312) 626-6799
Webinar ID: 916 9165 6774
Wondering what the difference is between EIDL and PPP loans? Or need help deciding which (or both) type of SBA coronavirus loan your business should apply for? Small businesses should contrast these two different Small Business Administration loans for small business coronavirus relief and decide which is better for your needs so you can apply for it.
The Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP) are two different programs funded by the CARES ACT, which includes stimulus funds in the form of loans and grants for America’s small businesses. The two loans share a lot of similarities but also have some important differences.
The EIDL is a loan of up to $2 million (depending on how much you’re approved for) meant to help businesses cover 6 months of operational expenses. You do have the pay the money back, eventually. However, EIDL loans also include a $1,000 to $10,000 cash advance which do not have to repay—even if you are ultimately rejected for the EIDL loan.
PPP loans can also be used for operational expenses, but their main purpose is to cover 8 weeks of payroll; you need to spend at least 75% of the loan on payroll expenses. You can also use a portion of the loan to cover mortgage, rent, or utility expenses. PPP loans can be as large as $10 million (depending on your payroll expenses) and will be forgiven as long as you follow the all the rules.
How Economic Injury Disaster Loans Work
An EIDL loan can be used on payroll costs, employee benefits, fixed debts such as mortgages, rents, or leases, accounts payable, and other bills. If you receive the forgivable grant, you need to spend it on those same expenses within 8 weeks of receiving the grant–i.e. in the amount of time, it will likely take before the main loan comes through.
Also called “Working Capital Disaster Loans” EIDL funds are issued directly from the US Treasury and you can apply right on the SBA’s website.
How Much Can I Borrow?
You can borrow up to $2 million, depending on the extent of your economic injury as determined by the SBA. The SBA will determine how much you need based largely on the information you supply about your business–including your business gross revenue and cost of goods sold over the last 12 months.
Additionally, you can request an emergency EIDL grant that you do not have to repay. This grant cannot exceed $10,000 or $1,000 per employee. You will receive this much sooner than the bulk of the loan–as soon as a few days of successfully submitting an application, according to the SBA. (In practice, however, businesses report much longer wait times on their EIDL advances.)