Two of the SBA disaster loan programs not only provide funds to struggling businesses but also have the potential for loan forgiveness. The Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan (EIDL) are designed to provide economic relief to businesses and have different requirements and incentives.
Paycheck Protection Program
The main goal of the Paycheck Protection Program is to provide aid and incentivize businesses to keep employees on the payroll. While the Paycheck Protection Program is a Small Business Administration loan, it does not come directly from the SBA. Instead, commercial lenders like banks and credit unions work with the SBA to disburse PPP loans. PPP loans are also forgivable for small business owners under certain circ*mstances.
As of July 6, 2020, the Paycheck Protection Program renewed the application with an updated deadline of August 8, 2020.
Economic Injury Disaster Loans
EIDLs are loans sent from the Small Business Administration that aim to provide aid to businesses that experienced a temporary loss of revenue. You can receive up to $1,000 to pay for immediate costs for your business.
EIDL business owners and independent contractors can use proceeds to cover a wide variety of expenses, such as the continuation of health care benefits, rent, utilities, and fixed debt payments.
The SBA resumed acceptance of new Economic Injury Disaster Loan (EIDL) applications on June 15 to all qualified small businesses, including U.S. agricultural businesses.
