{"id":197072,"date":"2020-05-22T07:00:01","date_gmt":"2020-05-22T14:00:01","guid":{"rendered":"https:\/\/www.nationalfunding.com\/blog\/?p=197072"},"modified":"2023-11-01T08:53:23","modified_gmt":"2023-11-01T15:53:23","slug":"sba-paycheck-protection-program-ppp-vs-economic-injury-disaster-loans-eidl-during-coronavirus-pandemic","status":"publish","type":"post","link":"https:\/\/www.nationalfunding.com\/blog\/sba-paycheck-protection-program-ppp-vs-economic-injury-disaster-loans-eidl-during-coronavirus-pandemic\/","title":{"rendered":"SBA PPP vs. EIDL during Coronavirus Pandemic"},"content":{"rendered":"

Updated 01\/11\/21<\/em><\/strong><\/p>\n

Please note:<\/strong> In January 2021, as part of the $900 billion COVID-19 relief bill, Congress has authorized $284 billion for the Paycheck Protection Program(PPP). The U.S. Small Business Administration and Treasury issued new guidance on a new round of Paycheck Protection Program (PPP) funding.<\/a><\/p>\n

On January 11th, the Paycheck Protection Program will reopen for new borrowers and certain existing borrowers. To promote access to capital, initially, only community financial institutions will be able to make first-time (First Draw) PPP Loans on Monday, January 11th, and Second Draw PPP Loans on Wednesday, January 13th.\u00a0 The PPP will open to all participating lenders shortly thereafter. The new round of PPP funding starting in January 2021 will also aim to fund more of the underserved business owners, women-owners, veterans, and minority-owned businesses. Full guidance on this can be read here<\/a>.<\/p>\n

The first and most important step to apply for SBA funding is to contact your community financial institution or banking partner.<\/strong> While the SBA is administering these loans, they will be serviced by banks, credit unions and SBA-approved lenders. Each lender is prioritizing by their current customers.<\/p>\n

The second step is to make it a priority to apply if you haven’t already.<\/strong> Don\u2019t delay, funds are available on a first-come, first-served basis.<\/p>\n

PPP vs EIDL – How do the Loans Compare?<\/h2>\n

These are two separate programs and the benefits of each depend on your business and situation. For first-time PPP loans, a business can borrow up to 2.5 times their average monthly payroll in loans that are 100% forgivable if they do not lay off any employees or if they rehire employees they’ve already laid off. A business can also apply for a second-draw PPP loan if they have already used a previous PPP loan.<\/p>\n

The EIDL allows businesses to borrow up to $2 million in loans and includes a grant of up to $10k. Read our FAQs as follows for more information on each loan.<\/p>\n

What is the Paycheck Protection Program (PPP)?<\/h2>\n

The primary purpose of the Paycheck Protection Program is to cover payroll costs. For a self-employed person, payroll includes paying yourself for services you perform. If you have employees, the primary benefit of PPP is geared toward protecting your employees and a portion of this loan can be forgivable. The PPP loan amount can be up to 2.5 times a business’s average monthly payroll costs, or up to maximum of $10 million for first-time (first-draw) PPP loans.<\/p>\n

As of January 2021, one of the biggest updates to the new PPP is that additional second-time (second-draw) funding is also available to businesses that had previously received a PPP loan.<\/p>\n

Borrowers are eligible for a second-time PPP loan of up to $2 million, provided they have:<\/p>\n