Below is a comparison of the two SBA relief programs that are available in response to the Coronavirus pandemic. This is intended to be a high-level, easy-to-understand comparison.
| Economic Injury Disaster Loan (EIDL) | Paycheck Protection Program (PPP) | |
| Who will give me my loan? | The loan will be directly with the SBA. | As a qualified and preferred SBA lender, First Reliance Bank can make the loan. |
| How much can I borrow? | The maximum loan amount under the EIDL is $2 million. | The lesser amount of: Your Avg. Monthly Payroll* Costs x 2.5 – or – $10 million. *Payroll includes salaries, commissions, tips, certain employee benefits (including health insurance and retirement benefits), state and local taxes and certain types of compensation to sole proprietors or independent contractors. Payroll costs specifically exclude employees who are compensated at $100,000 or greater, foreign employees, FICA and income tax withholdings. |
| What is the annual interest rate? | 3.75% for businesses, 2.75% for non-profits | 1.0% |
| What Is the term of the loan? | Up to 30 years | 2 years |
| When is the first loan payment due? | One year after the loan origination date (interest is accrued during the deferment). | At least six months after the loan origination date (interest is accrued during the deferment). |
| What can the loan proceeds be used for? | Financial obligations and operating expenses that could have been met had the disaster not occurred. | Payroll costs (as defined above), group healthcare benefits, insurance premiums, and interest (but not principal) on mortgages or other debt incurred prior to February 15, 2020, rent on any lease in force prior to February 15, 2020 and utility payments. |
| Do I need to pledge collateral? What about guarantees? |
The SBA will place a UCC lien against the assets of the business, and requires a personal guarantee. May also require personal real estate to be pledged to secure the loan. | No collateral is required from either the business or its owners. Personal guarantees are not required. |
| Is this a forgivable loan? | No, but you may be eligible to receive a grant for up to $10,000 to be used towards the loan. | Generally, two months of payroll costs, interest paid on mortgages, rent, and utility payments. The amount forgiven is based on maintaining full-time employees and compensation levels. Call for details. |
| How long does it take to apply? | 2-3 weeks plus an additional 5 days for funding | You can apply today but the bank is unable to disburse funds until it receives additional guidance from the SBA. |
| Can I apply for both Loans? | You may apply for both EIDL and PPP loans, but will only be eligible to obtain a loan from one program. | You may apply for both EIDL and PPP loans, but will only be eligible to obtain a loan from one program. |
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