The U.S. Small Business Administration (“SBA”) has two loan programs to help small business impacted by COVID-19: Paycheck Protection Program (“PPP”) and Economic Injury Disaster Loan (“EIDL”). An eligible business can get both of these loans and use the funds at the same time, provided that it does not use them for the same purpose.

As of June 15, the EIDL is now re-opened to all eligible small businesses. Compared to PPP loan which has very narrow permitted use of payroll costs and certain permitted non-payroll costs such as payments for utilities, rents, and mortgages, funds from EIDL can be used for financial obligations and operating expenses that could have been met had the disaster not occurred.

Eligible small business with employees less than 500 can apply for the low interest loan directly with the SBA. The maximum loan amount is $2 million (though the SBA has been unofficially capping the amount at $150,000 due to the high volume of applications it has received) and the interest rate is 3.75%. Loans are offered with long-term repayments to keep payments affordable, up to 30 years, and terms are determined on a case-by-case basis.

Note that this loan program is different from the EIDL advance (which is granted $1,000 per employee up to $10,000 for qualifying employers).

Eligible small businesses can apply for the EIDL loan directly with the SBA, and it takes about 15 minutes to complete the application on-line.  Here is a link to the on-line application: https://covid19relief.sba.gov/#/