SBA Loans - Economic Injury Disaster Loan and the Paycheck Protection Program

Comprehensive Relief for Small Business and Self-Employed Clients



SBA Loans – the Economic Injury Disaster Loan and Loan Advance:


Your official source:  https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources.


Here’s a great article on this and the PPP loan discussed below: https://www.forbes.com/sites/brianthompson1/2020/03/29/getting-cash-for-your-small-business-through-the-cares-act/#3fa87f6243a0 (may be slightly dated as some of the terms have been adjusted – see SBA website for specifics).


Small business owners that were in operation by January 31, 2020, are eligible to apply for the Economic Injury Disaster Loan (EIDL) and advance of up to $10,000. Also, available to sole proprietors or independent contractors.

These loans are up to $2 million, term of 30 years, interest at or below 3.75% and the first month’s payment is deferred for a year. No fees, guarantee fees or prepayment fees of any kind.

EIDLS are approved directly by the SBA and based solely on an applicant’s credit score. 

Loans less than $200,000 require no personal guarantee.

Borrowers can receive $10,000 in an emergency cash advance that can be forgiven if spent on leave, maintaining payroll, increased costs due to supply chain disruption, mortgage or lease payments or repaying obligations that cannot be met due to revenue loss. 


Our Advice:


Apply right now! Follow this link to apply for the SBA disaster loan directly. It’s a streamlined process so most of the information requested you will have at your fingertips.


Additionally, the application requests the business’s gross revenue for the 2.1.19 – 1.31.20 fiscal year, as well as the cost of goods sold for the same period. 


SBA Loans – the 7(a) Paycheck Protection Program (PPP)


Here’s an article highlighting some of the unknowns in this program.


Also, you can find a PPP loan fact sheet produced by the Treasury here.


Small business owners with fewer than 500 employees and self-employed individuals, sole proprietors and freelance workers are all eligible for this program, if the business was in operation before February 15, 2020.

Loans are equal to 2.5 times the average monthly payroll costs, including wages paid to employees up to $100,000 annually, as well as sick leave, healthcare and other benefits during the 1-year period before the date on which the loan was made. 

Maximum interest rate is .5% with a loan term of 2 years.

This loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities. At least 75% must have been used for payroll. Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. 

Loan payments are deferred for six months. No collateral or personal guarantee is required.

You apply for this loan through your participating lender of choice. The SBA will begin accepting applications April 3rd.  

Sample application form can be found here.


Our Advice:


This loan program is too good not to explore. We recommend you touch base with your lender of choice as soon as possible to begin the process. 


These benefits intersect in ways that are currently clear and in other ways that are definitely not. Of most pressing importance, employers that can layoff their workforce can do so now and re-hire that workforce once the SBA loans are approved. It’s not an either-or decision, but rather one of timing.



If you have any questions about COVID-19 comprehensive relief for small business and self-employed, please get in touch.


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