We sent an email about the Paycheck Protection SBA 7(a) loan program on 3/28/2020.  President Trump has requested this loan program be up and running by the end of this week.  If you are interested in this loan, you need to contact your local lender to start the loan process.  However, businesses with limited payroll costs may not qualify for much of a Paycheck Protection loan.  Fortunately, there is another SBA loan program currently available to small businesses called the Economic Injury Disaster Loan (EIDL).  You can apply for an EIDL loan so long as you have fewer than 500 employees, have been negatively impacted by Covid-19 and have been in business since January 31, 2020.  Sole Proprietors, Nonprofits and independent contractors also qualify.

Under EIDL, you can apply for a loan up to $2 million at 3.75% interest (2.75% for nonprofits) with a maturity of up to 30 years.  Loan applicants may request up to $10,000 as an “advance” on their EIDL loan.  The $10,000 advance is supposed to be provided within three days of application submission.  Loan proceeds, as well as the advance, must be used to maintain payroll to retain employees, provide paid sick leave to employees sick with Covid-19, pay rent or mortgage payments, meet increased costs due to supply chain disruptions and to repay other obligations that cannot be met due to revenue losses. Applicants are not required to repay any amount of the “advance”, even if they are subsequently denied an EIDL loan. 

You apply for the EIDL program through the SBA itself. Go to Right at the top in yellow is the link to apply for an EIDL loan.  You can apply for both an EIDL loan and a Payroll Protection Loan or you may convert an EIDL loan into a Payroll Protection Loan.  If your business has been negatively impacted by Covid-19, I encourage you to look into an EIDL and/or a Payroll Protection loan through the SBA. 

As always, call or email us with any questions and please stay healthy!!