Tracking the Moving Targets on PPP and EIDL Loans

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Many clients have been working through the nuances of whether to apply for the Economic Injury Disaster Loan (EIDL) or the Paycheck Protection Program (PPP).  These financial assistance programs are tied to the passage of the CARES Act and are meant to assist small businesses.

One of the biggest challenges in determining whether to apply is that the guidance on these loans continue to change.  For example, while the EIDL was originally thought to provide a $10,000 grant to applicants, it has now been modified so that small businesses may only receive $1,000 per employee up to 10 employees.

As of today, the SBA released the following comparison of the two most requested programs:

  • Paycheck Protection Program

    • Forgivable if used for payroll (minimum of 75% of the funds received) and the remaining for certain operating expenses (amount of any EIDL advance is not forgivable)

    • Up to $10 million; 1% interest rate

    • Forgivable

    • 2 year maturity

    • First payment due in 6 months.

  • Full EIDL Loan

    • To meet financial obligations and operating expenses that could have been met had the disaster not occurred (amount of any EIDL advance is forgiven)

    • Up to $2 million; 3.75% for businesses; 2.75% for non-profits

    • EIDL Loan not forgivable. EIDL Advance is forgiveable.

    • 30 year maturity

    • First payment due in 1 year.

When looking at loan options, don’t forget to look into your state’s SBA and your municipality.  Tampa just announced an emergency relief fund today.

Please reach out to the firm if we can help you with understanding the options available under the CARES Act. As you face the day-to-day questions of balancing business concerns, the law, and health and safety in the Coronavirus era, the firm is here to help.