Emergency Economic Injury Disaster Loans
- EIDLs, made through the SBA, have been available for roughly two weeks now.
- They offer 3.75% interest rates. With repayment options for a period of up to 30 years, determined on a case-by-case basis.
- The Eligible Expenses are:
- Fixed Debts
- Payroll
- Accounts payable, and,
- Other bills which can’t be paid because of the coronavirus
- Apply here
Emergency Economic Injury Disaster Loan Grants
- Available to small businesses as well as sole proprietors, independent contractors, and a few other niche situations.
- An advance of up to $10,000 dollars within 3 days of applying
- Application for the grant is done while applying for the above EIDL here
- These will not need to be repaid, even if you don’t qualify for an EIDL
- The Eligible Expenses are:
- Providing paid sick leave to employees directly impacted by COVID-19
- Maintaining Payroll during disruptions and slowdowns
- Meeting increased costs to obtain materials due to interrupted supply chains
- Making rent or mortgage payments; and
- Repaying Obligations that cannot be met due to revenue losses.
- Can be rolled into Payment Protection Project Loans
Payment Protection Program
- Amount totaling 2.5x average monthly payroll
- Average monthly payroll will be:
- The average total monthly payments for the 12 months prior
- The average of total monthly payments for the 12 week period beginning on either 2/15/19 or 3/1/19 for seasonal employers
- The average of total monthly payments for the period of 1/1/20 to 2/29/20 for business not in business during 2/15/2019 to 6/30/2019
- The Eligible Expenses are:
- Payroll Costs
- Group Healthcare costs during periods of paid sick, medical, or family leave, and insurance premiums
- Interest payments on mortgage obligations (not prepayments or principal payments)
- Rent (including rent under a lease agreement)
- Utilities; and
- Interest on any other debt obligations that were incurred before 2/15/2020
- An EIDL loan made after 1/31/2020 before PPP loans are made available may be refinanced into a PPP loan
- Forgiveness
- Loan money spent on payroll costs, mortgage interest, rent, or utilities will be forgiven proportionally to
- The average number of full time employees from 2/15/2020 to 6/30/2020 compared to the same period in 2019, or;
- For seasonal employers the average number of full time employees from 2/15/2020 to 6/30/2020 compared to 2/15/2019 – 6/30/2019, or;
- The average number of full time employees from 2/15/2020 to 6/30/2020 compared to 1/1/2020 to 2/29/2020, or;
- The loan forgiveness can be calculated without consideration of a reduction of full time employees or wages if:
- A reduction in staff or wages occurred between 2/15/2020 and 4/26/2020 and by 6/30/2020 the reduction is eliminated
Subsidy for Certain 7(a) or Other Small Business Loans
- The SBA will cover all principal, interest, and associated fees of covered loans for the next six payments
- Contact your financial institution to see if your SBA loans qualify for this relief
- In addition to the six months of direct payments, Congress is recommending lenders provide payment deferments when appropriate