CARES Act

Funding Options

A quick summary of key points within the CARES Act for both the Economic Injury
Disaster Loan (EIDL) and Paycheck Protection Program (PPP)

PPP

EIDL

PPP & EDIL

ELIGIBILTY

PPP Eligibility

  • Businesses in operation on or before 2/15/20 with 500 or fewer employees (cannot include independent contractors)
  • Non-profits 501c3 and 501c9, and faith-based
    organizations, including churches
  • Sole proprietors, independent contractor
  • Must have paid salaries and payroll taxes (W2s issued and 941 tax returns)
  • Affiliations have separate rule

EIDL Eligibility

  • US businesses, 501c3, contractors with less than
    500 employees

LOAN AMOUNT

PPP Loan Amount

  • Average payroll costs for 12 months X 2.5 months. The 12-month period can either be calendar year 2019 or previous 12 months.
  • Seasonal businesses and businesses not in operation 2/15/19 to 6/30/19 are subject to a different measurement period
  • Monthly Payroll includes wages, tips, bonuses, commissions, group health benefits, retirement benefits and employer paid State & Local taxes (including State Unemployment). Excludes compensation in excess of $100K only – you can include benefits to the $100K compensation for an individual.

EIDL Loan Amount

  • Up to $2 million determined based on need and
    repayment capacity

PURPOSE OF LOAN

PPP Purpose of Loan

  • Payroll costs (at least 75% of proceeds must be used for payroll costs).
  • Mortgage interest (not principal or prepayment
  • Rent payments
  • Utility payments (Power, Gas, Water and Telecommunications)
  • Interest payments on any other debt incurred before 2/15/20
  • Refinancing of SBA EIDL made between 1/31/20 and 4/3/20

EIDL Purpose of Loan

  • Working captial needs until resumption of normal operations
  • Payroll, paid sick leave
  • Increased costs to obtain materials due to supply chain interruptions
  • Expenses that cannot be paid due to revenue loss
  • Other uses include rent or mortagage paymen

COLLATERAL/ GUARANTEE

PPP Collateral/Guarantee

  • None – Guaranteed by SBA

EIDL Collateral/Guarantee

  • Collateral taken on loans less than $25K
  • Guarantee required on loans greater than $100K

INTEREST RATE

PPP Interest Rate

  • Fixed 1%
  • No participation or prepayment fees
  • Principal & interest deferred for 12 month

EIDL Interest Rate

  • 3.75% for business; 2.75% for non-profits
  • No participation or prepayment fees
  • Principal & interest defferred for 12 month

TERM

PPP Term

• Any amount not forgiven – 2 years

EIDL Term

  • Not to exceed 30 years

FORGIVENESS

PPP Forgiveness

  • Up to 100% of both principal and interest if proceeds used on qualifying expenses
  • Forgiveness reduced if employee counts or employee wages are reduced; rehire quickly
  • Only 25% of loan amount can be used for non-payroll costs
  • Reduced by EIDL loan
  • Loan proceeds must be spent within 8 weeks on qualifying expenses

 

EIDL Forgiveness

  • Up to $10k if proceeds used on qualifying expenses

APPLY

PPP Apply

  • Financial institutions approved to accept SBA Loans
  • sba.gov/paycheckprotection/fin

 

EIDL Apply

  • Directly through SBA
  • covid19relief.sba.go
NOTE: The same expenses cannot be included in both your EIPL and PPP applications if you apply for both programs. No double-dipping.