The Economic Injury Disaster Loan vs. The Paycheck Protection Program
March 30, 2020
On March 27th, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a stimulus bill that includes a loan program to keep small businesses afloat during mandated COVID-19-related closures. The CARES Act includes a Paycheck Protection Program (PPP) which authorizes up to $349 billion of federally guaranteed loans to qualifying small businesses. This new loan program is based on the architecture of the SBA’s existing 7(a) loan program and will make forgivable loans of up to $10 million available to qualifying small businesses.
Borrowers are eligible to apply for an EIDL and PPP loan. If approved for an EIDL loan, borrowers are eligible to re-finance the EIDL loan with the PPP loan.
The table below compares the terms of the EIDL and PPP loans:
[table id=6 /]
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