Paycheck Protection Program Update
Source: Colorado Office of Economic Development and International Trade
Last Friday, lenders started accepting applications for the
Paycheck Protection Program
(PPP) for small businesses and sole proprietors. This Friday, April 10, independent contractors and self-employed will also be able to apply for a PPP loan.
Banks are receiving many requests and are prioritizing existing customers.
We urge you to reach out to your banks as soon as possible so you can submit your application quickly.
We recommend that you first reach out to the bank that pays out your business’s payroll. Ask your bank if it is authorized to process your Paycheck Protection Program loan. If your bank is not authorized, you can
find an eligible lender here
Four SBA Programs to Know
Paycheck Protection Program (PPP)
Provides loan forgiveness for retaining employees by temporarily expanding the traditional SBA 7(a) program.
EIDL Loan Advance
Provides up to $10,000 of economic relief to businesses that are currently experiencing temporary difficulties
SBA Bridge Express Loans
Enables small businesses who currently have a business relationship wiht na SBA Express Lender to access up to $25,000 quickly.
SBA Debt Relief
Provides a financial reprieve to small businesses during the COVID-19 pandemic.
PPP vs EIDL: Can and should I apply for both?
Borrowers can apply for both an SBA Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP) loan. However, PPP loan funds and EIDL funds cannot be used for the same purpose.
If your EIDL
for payroll costs, it does not affect your eligibility for a PPP loan.
If your EIDL
for payroll costs, your PPP loan must be used to refinance your EIDL.
- PPP's maximum loan amount is $10 million with a fixed 1% interest rate and a maturity of two years.
- EIDL's maximum loan amount is $2 million with an interest rate at 3.75% for businesses and 2.75% for non-profits and a maturity of up to 30 years.
If you are applying for both, you can accept PPP first before deciding whether to close on your EIDL approved loan. You have 60 days after approval to decide whether or not to close your EIDL loan. Borrowers who accept both loan funds should document the uses of the funds appropriately.
- At least 75% of PPP funds must be used for payroll for it to be eligible as a forgivable loan. The remaining funds can be used for different purposes.
- Any advance up to $10,000 on the EIDL will be deducted from the loan forgiveness amount of the PPP loan.
- The application period for PPP loans runs through June 30, 2020, but the EIDL application period runs through December 31, 2020. If you have working capital need beyond what is provided by PPP, you can apply for additional assistance through the EIDL program later on.
COVID Hotline: 303-860-5881