Do you know your loan options?: PPP vs EIDL
We can help you navigate
The Federal Government has dedicated over $350 billion in relief for small businesses, available through several loan programs. We have laid out each option so that you can carefully consider which loan makes the most sense for your business. If you have additional questions about each one contact your lender, check out the SBA website, or contact us at Viking Mergers and we can help you understand your options as a business owner.
IMPORTANT UPDATE:
As of March 31, the U.S. Treasury department released new guidance on the Paycheck Protection Program (PPP) aimed at helping small businesses in the US. There are several key changes to the PPP that are different from the initial release. The banking industry is waiting on final rules from the SBA to determine additional requirements to make a loan. Those updates are reflected in the infographic below.
Another notable update will affect when you can apply based on the business you own.
- Starting April 3, 2020, small businesses and sole proprietorships can apply for and receive loans to cover their payroll and other expenses through existing SBA lenders.
- Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans to cover they payroll and other expenses through existing SBA lenders
The first loan option we will talk about is the Paycheck Protection Program (PPP).
What can the Paycheck Protection Program (PPP) do for my business?
- The federal government has approved a $350 Billion dollar loan available, creating major focus on the stimulus checks received by millions of Americans, but can we talk about the billions of dollars set aside for small businesses?
- The package includes a $350 billion forgivable loan program intended to save jobs. It’s called the Paycheck Protection Program.
- Any business with fewer than 500 employees can apply.
- There’s a formula that dictates how much they would get. If the business spent that money on employees, a mortgage, rent or utilities, the principal of the loan would be forgiven.
- Debt obligations incurred before 2/15/2020
What is the Emergency Injury Disaster Loan (EIDL)?
Emergency Injury Disaster Loans (EIDL) are the Small Business Administration’s (SBA) disaster loans which act as a primary form of Federal assistance for the repair and rebuilding of non-farm, private sector disaster losses.
The Economic Injury Disaster Loan Program (EIDL) is able to provide $2 million of financial assistance based on the actual amount of economic injury to the small businesses or private or non-profit organizations.
An EIDL provides relief from economic injury caused directly by the disaster and permits you to maintain a reasonable working capital position during the period affected by the disaster. EIDL’s do not replace lost sales or revenue, but were created for situations like COVID-19 that has swept across the globe endangering thousands of small businesses across the United States.получить займы онлайн
Here are few things that the EIDL covers:
- Payroll
- Fixed Debts
- Accounts payable
- Other expenses that cannot be paid back as a result of the disaster
- Up to $2 Million is available
- Rate is 3.75% for small business and 2.75% for nonprofit organizations
- Terms are up to 10 years
- 0% is eligible for forgiveness
Do you want to better understand your options before applying for economic relief? Our team of small business experts at Viking Mergers can help you navigate these uncharted waters