Understanding the Economic Injury Disaster Loan (EIDL) vs The Paycheck Protection Program (PPP)

Understanding the Economic Injury Disaster Loan (EIDL) vs The Paycheck Protection Program (PPP)

  Loan Type Economic Injury Disaster Loans (EIDL) Paycheck Protection Program-Passed through Care Act
  Offered
  Through
SBA SBA Approved Bank
  Also offered
  through
n/a Fintechs who can get approval in less than 48 hours
  Loan
  Forgiveness
Not at this time, could change Forgivnesss or Partial Forgiveness
  Loan based
  on
Loss to date, expected future loss Average Payroll over 12 month period
  Loan Caps 2 Million 10 Million Cap
  Personal
  Guarantee
The SBA will place a UCC lien against the assets of the business No collateral from business or it’s owners
  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)
     Underwriting
  Time frame
2-3 weeks plus an additional 5 days for funding Unkown at this time, program is being set up as of 3/29/2020
  Advances 10,000 immediate advance, available within three days None
  Who can
  apply
Small Businesses, As a general guide, less than 500 employees and $35 million in revenue would typically qualify. Small businesess, including 501(c)(3) nonprofits, sole-proprietors, independent contractors, and other self-employed individuals
  Allowable
  uses for loan
Financial obligations and operating expenses that could have been met had the disaster not occurred Payroll (employee salaries, paid sick or medical leave), insurance premiums, and mortgage/rent, and utility payments.
  Loan
  Maturity
  max
Up to 30 years 10 Years
  Interest Max
  (if not
  forgiven)
3.75% for businesses, 2.75% for non-profits 4%
  Pre-
  payment
  Fees
None None
  Priorites
  Businesses:
n/a In Rural Markets, Veterans of Military, Women Owners.
  Can I apply
  now? 
Yes, the application process is live, and loans are available now. There is no obligation to accept the loan if you qualify. The SBA typically allows 60 days to accept the loan offer, but you can always extend this if needed. Therefore, it is better to apply ASAP No. Now that the CARE Act is law, the SBA will give their loan guidelines to the banks. The banks will then prepare their loan application process. We expect this to take at least two weeks

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