Paycheck Protection Program (PPP)
This is a loan equal to 10 weeks’ worth of payroll costs (excluding employees who make over $100k) that
converts into a grant
if the borrower keeps all pre-crisis (before Feb 15th) employees on the payroll through an eight week period after the loan is granted. If employees are laid off, borrowers are responsible for a portion of the loan proportional to the salary of the laid-off employees. A full conversion from loan into a grant can occur if the borrower eliminates the reduction in employees and wages by June 30th, 2020. Any business with less than 500 employees may apply.
You will need to apply through your own bank if they are qualified SBA lender. See your bank's website to determine whether they are a qualified SBA lender.
Economic Injury Disaster Loan (EIDL)
These are up to $2 million loans with a maximum fixed interest rate of 3.75% and loan terms of up to a maximum 30 year repayment period to be used to meet costs such as payroll, rent, mortgage etc, that cannot be met as a result of the COVID-19 crisis. Terms are determined on a case-by-case basis based on the borrower’s ability to repay. No personal guarantees required. Collateral is required for loans of over $25,000 but the SBA will not decline a loan because of lack of collateral and will only require applicants to pledge collateral that is available.
There is currently a nationwide disaster declaration and small businesses in all U.S. states and territories are eligible to apply. In addition to applying for the EIDL loan, when submitting their EIDL application, applicants can also apply for a $10,000 loan advance. This “loan advance” is paid out within three days of a successfully submitted application and
does not need to be repaid
, even if the pending EIDL application is subsequently denied.