Economic Injury Disaster Loan (EIDL) Program and Paycheck Protection Program (PPP)
The CARES Act expanded the Economic Injury Disaster Loan (EIDL) Program, and additionally created the Paycheck Protection Program. Note that you cannot receive both loans – but you can apply for both and decide which one to take if you qualify for both.
EIDL Program – This program is administered directly by the SBA. Key features of this program:
- Loans of up to $2 million.
- Favorable interest rates
- Available to small businesses, including sole proprietors and independent contractors, as private nonprofits, among others.
- An advance of $10,000 is available before the loan is approved. If the application is not approved, the advance is forgiven.
- It should be possible to complete the entire application online.
More information on EIDL Program is available here.
PPP – This program is administered by SBA approved financial institutions. It is expected that most banks and credit unions will be able to process program applications. Key features of this program:
- The maximum loan available is the lesser of $10 million or 2.5 times average monthly payroll costs incurred during the 12-month period prior to the loan date.
- The loan is 100% forgivable if used for the intended purpose.
- Available to businesses or 501(c)(3) nonprofits with less than 500 employees, including sole proprietors, independent contractors, and other self-employed individuals.
More information on the PPP is available here. Your bank or credit union should also be able to assist, as applicants will ultimately be completed through local financial institutions.
Click here to return to our main Coronavirus information page.
The material appearing in this communication is for informational purposes only and should not be construed as legal, accounting, or tax advice or opinion provided by Lodder CPA PLLC. This information is not intended to create, and receipt does not constitute, a legal relationship, including, but not limited to, an accountant-client relationship. Although these materials have been prepared by a professional, the user should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented. Lodder CPA PLLC assumes no obligation to provide notification of changes in tax laws or other factors that could affect the information provided.