Economic Injury Disaster Loan & Paycheck Protection Program

The United States Small Business Administration’s Economic Injury Disaster Loan (EIDL) and Paycheck Protection Program (PPP) are intended to help small businesses stay afloat and survive the economic disaster caused by COVID-19. They are available for businesses with 500 or fewer employees (with exceptions for more employees). These deferred payment loans require minimal to no collateral, may be forgiven, and have low fixed interest rates.

Economic Injury Disaster Loan (EIDL)

Purpose is to provide economic relief to businesses experiencing a temporary loss of revenue due to COVID-19. 

Who can Apply? Businesses in the united States and teritories, including internationally owned business located therein, operating since 01/31/2020 including:

• Sole proprietors
• Independent contractors
• Cooperatives with 500 or fewer employees
• Employee Stock Ownership Plans (ESOP) with 500 or fewer employees
• 31(b)(2)(C) Tribal business with 500 or fewer employees
• Businesses defined as small according to US SBA size standards based on industry
• 501(c), (d), or(e) Private nonprofit organization

What would cause ineligibility?

• Applicant is not engaged in any illegal activity as defined by federal guidelines
• No principal of the Applicant with a 50% or greater ownership interest is more than 60 days delinquent on child support obligations
• Applicant is not an agricultural enterprise e.g. a farm, other than an aquaculture enterprise, agricultural cooperative, or nursery
• Applicant does not present live performances of a prurient sexual nature or derive directly or indirectly more than de minimis gross revenue through the sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature
• Applicant does not derive more than a third of gross annual revenue from legal gambling activities

What can the loan be used for? Payroll and related benefits, Accounts payable, and Fixed Debts.

Payroll costs include:

-   Salaries, wages, commissions, tips, etc.

-   Vacation, parental, family, medical, or sick leave

-   Allowance for separation or termination

-   Payment for employee benefits consisting of group health coverage including insurance premiums, and retirement

-   And other items

For a sole proprietor or independent contractor, this includes:

-   Commissions

-   Income

When you should apply? 01/31/2020-12/31/2020

Where can you apply? Directly with the US SBA

https://covid19relief.sba.gov/

The maximum loan amount is 2,000,000 with an interest rate of 2.75-3.75%.

Paycheck Protection Program (PPP)

Purpose is to incentivize small businesses to retain their workforce during the COVID-19 crisis.

Who can apply? Small businesses in the United States and territories, including internationally owned businesses located therein, with 500 or fewer employees operating on 02/15/2020 including:

- Sole proprietors

- Independent contractors

- Eligible self-employed persons

- Partnerships

- S-corps

- C-corps

- 501(c)(3) Nonprofit organizations

- 501(c)(19) Veterans’ organizations

- 31(b)(2)(C) Tribal business

Businesses with more than 500 employees but defined as small according to US SBA size standards based on industry.

What would cause ineligibility? 

-   You are engaged in any activity that is illegal under federal, state, or local law

-   You are a household employer (individuals who employ household employees such as nannies or housekeepers)

-   An owner of 20 percent or more of the equity of the applicant is incarcerated, on probation, on parole; presently subject to an indictment, criminal information, arraignment, or other means by which formal criminal charges are brought in any jurisdiction; or has been convicted of a felony within the last five years

You, or any business owned or controlled by you or any of your owners, has ever obtained a direct or guaranteed loan from SBA or any other Federal agency that is currently delinquent or has defaulted within the last seven years and caused a loss to the government

What can the loan be used for? -   Payroll costs for your employees, whether they can work or not, including paid sick or family medical leave compensation

-   Payment for group health care benefits, including insurance premiums

-   Mortgage interest

-   Rent

-   Utilities

-   Interest payments on other debt incurred before 02/15/2020

Refinancing an SBA EIDL loan made between 01/31-04/03/2020

Payroll costs include:

-   Salaries, wages, commissions, tips, etc.

-   Vacation, parental, family, medical, or sick leave

-   Allowance for separation or termination

-   Payment for employee benefits consisting of group health coverage, including insurance premiums, and retirement

-   And other items

For a sole proprietor or independent contractor, this includes:

-   Commissions

-   Income

Net earnings from self-employment or similar compensation

When you should apply? 04/03/2020-06/30/2020 (or until funds are exhausted)

Where can you apply? US SBA approved lender: start with a bank you have a current relationship with

Each lender has their own application process. Due to high volume, many are only accepting applications from those with current relationships

The maximum loan amount is 10,000,000 with an interest rate of 1.0%. No loan fees.