COVID Disaster Loans (EIDL) Vs Paycheck Protection Program (PPP) Loans

COVID Disaster Loans (EIDL) Vs Paycheck Protection Program (PPP) Loans

COVID Disaster Loans (EIDL) Vs Paycheck Protection Program (PPP) Loans

On December 22, 2020 Congress passed the new stimulus bill which includes new Paycheck Protection Program loans and new EIDL grants along with other small business relief. Read more about that legislation and apply for a new PPP loan here.

There are two main loan programs to help small business owners through the COVID-19 crisis: 

  • Economic Injury Disaster Loans (EIDLs)
  • SBA Cares Act Paycheck Protection Program Loans (PPPs)

On April 23, 2020 Congress authorized an additional $310 billion in funding for PPP loans and $60 billion for EIDL.

These loan programs have some significant differences, and many small business owners are confused. In the first part of this article we spell out the basic program requirements, and in the second, we answer some frequently asked questions about Economic Injury Disaster Loans (EIDL) versus Paycheck Protection Program (PPP) Loans.

Please keep in mind this information is changing rapidly and is based on our current understanding of the programs. It can and likely will change. Although we will be monitoring and updating this as new information becomes available, please do not rely solely on this for your financial decisions. We encourage you to consult with your lawyers, CPAs and Financial Advisors. To review your real-time funding options with one of Nav’s lending experts, please contact us.

Maximum Loan Amount

EIDL: $2 million

PPP: $10 million

Grant / Forgiveness

EIDL: The COVID Economic Injury Disaster Loan includes an emergency grant of  “not more than $10,000” that is supposed to be made within three days of application. It currently provides $1000 per employee and requests are generally taking weeks to process. These grants do not have to be repaid as long as funds are used for: 

  • providing paid sick leave to employees unable to work due to the direct effect of the COVID–19; 
  • maintaining payroll to retain employees during business disruptions or substantial slowdowns;   
  • meeting increased costs to obtain materials unavailable from the applicant’s original source due to interrupted supply chains; 
  • making rent or mortgage payments; and 
  • repaying obligations that cannot be met due to revenue losses. 

PPP: If you get one of these loans, you can request forgiveness of the portion of the loan that covers:

  • Payroll costs
  • Interest on a mortgage
  • Rent 
  • Utilities 

No more than 40% may be used for nonpayroll expenses. Your loan forgiveness will be reduced if you decrease your full-time equivalent employee headcount and/or salaries and wages. You may also receive forgiveness for additional wages paid to tipped workers. There is a provision that allows you to rehire employees to qualify for forgiveness, and there are exceptions for businesses unable to return to prior staffing levels. 

Read: How to Apply for Forgiveness for your PPP loan


Interest Rate

EIDL: 3.75% or 2.75% for non profits.

PPP: 1% on any remaining balance after forgiveness

Repayment Period

EIDL: up to 30 years 

PPP: 2 years for any balance not forgiven. The PPP Flexibility Act provides a 5-year term for any loans made on or after June 5, 2020. (Lenders may extend a 5 year repayment term for PPP loans made prior to that date.)

Who Qualifies? 

EIDL: To qualify, you must be 

  • A small business, cooperative, ESOP or tribal business with 500 or fewer employees;
  • A small businesses that meets SBA size standards
  • An individual who operates under as a sole proprietorship, with or without employees, or as an independent contractor; or
  • A private non-profit or small agricultural cooperative; 
  • Your business must be directly affected by COVID-19

PPP: The following businesses may be eligible: 

  • Small businesses or non-profit 501(c)(3) organizations with 500 or fewer employees, or small businesses that meet SBA size standards; 
  • 501(c)(19) veteran’s organizations  or tribal concerns that meet the SBA size standards; 
  • Sole proprietors or independent contractors; 
  • Businesses in the food or hospitality industry (NAICS codes beginning in (72) may be eligible on a per location basis; normal affiliation rules are waived for franchises or businesses receiving financial assistance from an SBIC.

Must Be In Business By

EIDL: January 31, 2020 

PPP: February 15, 2020

Where to Get These Loans

EIDL: SBA COVID-19 Disaster Assistance Portal

PPP: Nav helps match borrowers to SBA lenders and agents for PPP loans. There is no fee for this service. Fill out your PPP application now

Personal Guarantee

EIDL: Only for loans above $200,000 

PPP: No. 

Collateral Requirements

EIDL: Yes for loans over $25,000

PPP: No 

Funding Timeframe

EIDL: The grant of up to $10,000 is supposed to be made within three days of application though to date no one has been funded that quickly. The loan disbursement of up to $25,000 (if approved) may take weeks due to record loan volume. 

PPP: Loans are processed by lenders then must be approved through the SBA. Once approved by the SBA, they must be funded within ten calendar days.

Payment Deferments 

EIDL: Payments are deferred for a year. 

PPP: Payments are deferred until loan forgiveness is determined.

Allowable Use of Funds

EIDL: In addition to the use of funds for the grant listed above, EIDLs are working capital loans that may be used to pay fixed debts, payroll, accounts payable, and other bills that could have been paid had the disaster not occurred. The loans are not intended to replace lost sales or profits or for expansion. Funds cannot be used to refinance long-term debt.

PPP: Loan proceeds may be used for: 

  • payroll costs; 
  • costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums;
  • employee salaries, commissions, or similar compensations;
  • payments of interest on any mortgage obligation (but not to pay principal or to prepay a mortgage)
  • rent (including rent under a lease agreement); 
  • utilities; 
  • interest on any other debt obligations that were incurred before the covered period
  • refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020

Credit Requirements

EIDL: A personal credit check is required for all owners with 20% or more ownership. A business credit report from Dun & Bradstreet is standard on Disaster Loans for loan amounts above $200,000. 

PPP:  None is required, however, and few lenders appear to have checked credit for PPP loans.

Frequently Asked Questions Vs. EIDL and PPP 

Can I Apply For EIDL and PPP?

You can apply for both. But you can’t  “double dip” and use funds from both loan programs for the same purpose. 

Can I Get PPP and the Payroll Tax Credit?

There is a payroll tax credit of up to 50% of qualified wages for certain businesses whose operations have been fully or partially suspended by a government order or whose gross receipts in a quarter have fallen by at least half compared to a similar quarter the year before. Separately, a payroll tax deferral provision allows employers to defer the deposit and payment of the employer’s share of Social Security taxes and self-employed individuals to defer payment of certain self-employment taxes.

Businesses cannot receive both the Employee Retention Payroll Tax Credit and a Paycheck Protection Program Loan. However, the PPP Flexibility Act allows employers and the self employed to get PPP and the Payroll Tax deferral.

Which Is Better for My Business: EIDL or PPP? 

You may be eligible for both. Ultimately, this is an individual decision that will depend on a number of factors, including how much you qualify for, how you plan to use the funds and whether you expect to benefit substantially from forgiveness under PPP. Our advice is to do the following:

This article was originally written on April 2, 2020 and updated on January 20, 2021.

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148 responses to “COVID Disaster Loans (EIDL) Vs Paycheck Protection Program (PPP) Loans

  1. We missed ppp and got an eidl for $10,000 and received it.
    I am sole proprietor with 00 employees,
    Is this money considered a grant or a loan?
    I put the wrong email address so didnt get an answer

  2. I don’t see any clear information and guidelines for an independent contractor how to use/spend eidl loan as there is no business regulations to provide documents to SBA if the ask. If approved for less then 10000 after July 13, how to use that.

  3. Hello, Small business received the ppp and the eidl loan. We are using them to cover the intended expenses and went so far as to create a separate bank account for both to make clear what they are used for. My question is, our cash operating account is showing growth and we would like to pay down expensive long term debt, is that ok to do while having the eidl and ppp in seperate accounts? Thanks

  4. I applied for the EIDL Grant in March and never did receive it so I then applied for the PPL Loan in April and was approved for 4400.00
    then Yesterday June 63 out of the blue I received a 9000 EIDL grant deposit into my account. 1000 for each 9 employees.
    I was in the process of getting my PPL forgiven. But now unclear as to what to do. I read that you have to deduct the EIDL Grant from the PPL in my case it would
    be 4400-9000 leaving a negative amount of -5600
    Can I Keep both the EIDL grant money of 9000 and the PPL Loan of 4400 and get that amount forgiven as long as I don’t use the funds for the same thing?
    I am still very confused on this.

  5. I have a small business with little overhead. My main expense is the loan I took out as a start up. I’ve now received an EIDL loan in an amount which would almost pay off that loan. That in turn would significantly improve my ability to weather the crisis. However, I’m concerned about whether that would be an impermissible use since the loan isn’t supposed to “refinance a long term loan.” I can’t find any authority which defines “long term loan.” Would paying off a 5 year business startup loan be a permissible use of a EIDL?

  6. Thank you for the Information.
    I am waiting on my PPP, and I just signed for the EIDL loan. Will signing for the loan break my chances of getting the PPP?
    I know that they cannot be served as the same purpose.

  7. I applied for assistance over a month ago and received approval today for an EIDL loan. I didn’t receive a deposit to my account for a grant at any point and am wondering if you are hearing about business being approved for the loan but not receiving the grant.

  8. Just looked at the ppp forgiveness form. Looks like
    The amount of forgiveness doesn’t reduce by eidl advance. It’s just list ppp loan amount (line 9), didn’t mention anything about eidl advance amount. Do I get it right? Please let me know. Thank you.

  9. My question is, I applied for the EIDL. Last Saturday I received an email to set up an account and then I accepted an offer from the SBA. 2 days later, I was approved for that amount and asked to sign closing documents. I never received any grant money as of yet and it’s been 4 business days since and no word. How long does it take for the funding of the loan and how come it seems all these businesses got grant money before a verdict on a loan?

    1. Rob – Did you put any employees on your application? The SBA has been providing the grant based on $1000 per employee. If you put 0 employees then it would seem you would not get an advance. If that’s not the case (you did not enter 0 employees) or not, I would definitely recommend you talk to someone at SBA to clarify. Call the SBA Disaster Loan Assistance hotline: 1-800-659-2955

      As for funding timeline, the B hasn’t been disclosed so you could ask that question as well. We’d be interested to hear how long it takes to get funded.

      1. I just spoke with the SBA. They informed me that even though i put my employees down, i didn’t check a box so i won’t be getting the advance as its too late. As for funding, they are not sure when that will be and can’t answer that question.

  10. while reading the article above (EIDL Vs PPP) I have filled below form, and I hope you do not run my credit, coz, I have built my credit score very hardly.

    PPP: Nav is helping match borrowers to SBA lenders for PPP loans. There is no fee for this service. Fill out your PPP application now

    1. Nav does not pull your credit to qualify you for for PPP loans. Individual lenders may check credit, though most are not checking them for PPP. If you are using a Nav account to monitor your personal and/or business credit, an inquiry from Nav will be a soft inquiry.

  11. We are applying for an EIDL as a small 2 person team of independent contractors; we have had to use our personal lines of Credit since Feb 1 to pay a lot of expenses due to no income. 2 questions— As I understand the current rules we can only get 2000 not 10000K grant advanced with no repayment. AND—the “can’t use funds from the EIDL to “refinance” long term debt..” Can I make application to include the expenses we have already paid on lines of credit —Int rate 13 to 15% APR. to “reimburse” ourselves? These cost and working expense obligations had to be paid. Do I need to anticipate future expenses coming due? We should have some income coming in within the next 45 days

    1. EIDL loan funds may be used to pay working capital expenses the business could have paid had the disaster not occurred. The following article may be helpful, but beyond that we recommend you either talk to SBA or to your Small Business Development Center (SBDC): FAQs about EIDL

  12. Hello,
    I am a self employed with a few employees. I got the PPP Loan approved and about ready to deposit to my bank. Then I got approved for EIDL Loan. I wonder if I can take both loans and use it for different purposes (PPP loan just for payroll, EIDL just for other business related expenses).
    My question is while we are back in business and making money as business revenue, can this revenue use for our personal finance such as pay off our personal credit card debt. Because we use EIDL loan for business expenses, then we can use business revenue for personal use ( even luxury) as long as we can prove it is not come from EIDL loan ( which should put in a separate bank account). Thanks for reading my question.

    1. Katie –

      Our understanding is you can use PPP and EIDL loans for different purposes. However, the way the CARES Act reads it appears you must subtract the EIDL grant (advance) – not the loan – from the PPP for forgiveness purposes. That is our understanding but you may want to check with SBA Disaster Assistance to confirm.

      We always recommend businesses have a business checking account and pay themselves compensation from their business account but do not write checks for personal purchases from their business account.

  13. Hi- I applied for the EIDL loan and grant and have a $2000 deposit into my business account (which is appreciated). I received no notice of this deposit from the SBA. I’m assuming it was the grant and they’re processing my application but has anyone else had money deposited with no correspondence? I feel like an idiot because I write my application number down instead of printing it out and cannot find it…so I have no reference number to use.

    1. That’s the scenario we have heard from other business owners. Did you apply with two employees? If so then it sounds like it is likely the grant. You can try calling the SBA Disaster Assistance hotline to see if they can assist.

  14. For the EIDL, what “proof” would have to be shown to get the advance forgiven? When will that be requested?

  15. Two questions:
    1-I applied for the EIDL for my small LLC. I received a deposit in the amount of $1,000, which I assume is the advance. I actually do not want the loan. How do I let them know that?

    2- In addition to the work I do in my LLC, which has it’s own TIN, I also did enough contract work in 2019 reported via my personal SS# to qualify for unemployment. Can I still apply for & receive unemployment even though I received the $1,000 EIDL advance – since they are via two different TINs/SSn? I know when you receive a PPP loan, you have to wait 8 weeks before applying unemployment, but again, wondered if this is different since the LLC business is separate from the W-2 contract work I do under my personal SS#. If I cannot apply right now, what is the waiting period from the time I received the $1000 in my business account before I can apply for unemployment?

    1. Terrie, the way I understand it (and I am not a tax accountant or an attorney, so don’t consider this financial advise) is that you can keep the IDIL grant without taking the loan. Have they notified you that your EIDL loan application has been approved? If so, all you need to do is simply decline to take the loan. If you have not heard back yet, you likely will at some point. At that time, you can decline the loan. You will want to consult with your tax advisor on the 2nd question. That being said, the way you can use the EIDL is not tied to payroll, so there would be no double-dipping by using the grant and unemployment based upon my understanding of the EIDL. That being said, you should consult with your tax advisor or a tax attorney to confirm.

  16. Is it ture, if owner received both PPP loan and EDIL cash advance, then the EDIL advance cash ($10,000) become not forgiveable? It needs to be deduct from the ppp loan amount and payback? Example PPP loan $11,000- EDIL cash advance $6000=$5,000 need to payback to SBA?

  17. I’m curious. I am a very small business owner. I applied for, and received, PPP for one employee. I have not yet been able to pay myself. I also received the EIDL for one employee ($1000). Do I still have an application in? I have no idea. $1000 is 1/3 of my rent and I can’t pay $3000 out of PPP for rent. SBA cannot tell me where I am with my application. I’m so lost as to what’s going on. I guess I’m curious if I still have an application in SBA or not. I had another business owner tell me that the $1000 is the end and that will not work for us …

    1. If you still have anything coming from your EIDL, the SBA is who should be able to give you an answer. Did you get the entire loan amount for your PPP? Or was the amount you applied for only $1,000?

  18. My business was destroyed by the government’s demand to shut down non-essential businesses.

    The application for the PPP has within it a section asking if we want the EIDL counted as well, but they didn’t honor that request.

    I got a PPP deposit for only paying Payroll.

    All other bills (Rent, Energy, Water, Sewer, Internet, Phone lines, Permits, Waste, Etc.) are due already twice!
    How are we to pay for all that – and I get nothing because I owned the small business and I am not on the payroll myself! so I also have to pay for my home bills and food!
    I don’t qualify for Unemployment since I am self employed, and the state of CA lied; NOT A SINGLE DIME WAS GIVEN TO US, they just shut us down 7 weeks ago for no fault of our own and gave the illegals stimulus and the potheads Unemployment on top of the Unemployment they are already getting.
    How if the government forced us to shut down and the EIDL stopped taking applications – and now only takes them from agriculture companies!
    I didn’t even get the pathetic stimulus check because I file and pay taxes at the end of the year – despite paying my 2019 and 2018 on time – and it’s all because I don’t have direct deposit. Of course I don’t – I am a business owner and it doesn’t work that way.
    They destroyed our futures and that of our loved ones. I have never heard of a government that shuts down businesses that never had a single violation.

    1. No illegal immigrant will get stimulus. Just in case you were not aware. You sound so negative towards the situation. No wonder you are phasing so many struggles. I have phase unfairness in my life but never read such a negative comment before like now with yours. Government is this, Illegals are that, etc etc. You probably can’t hear yourself but your attitude won’t bring you calmness. Everyone is suffering .. everyone!

  19. My business is small and I applied for the EIDL when it first came out for 10k. They then ran out of funds and I had applied on the second round for the PPP, although I ideally just wanted the 10k EIDL as I am a restaurant and currently cannot hire my staff back due to not enough business. I was just notified that the PPP was accepted as well as receieved an email finally from SBA all that said is we were working on it. If I do not sign for the PPP funds would that look better to qualify for the 0k SBA- I know it all runs through the SBA so they are already aware that I was approved….However I have not signed for the monies. II feel like most of the PPP will not be forgiven due to only 25% of my staff being abble to work. Any advice?

    1. You can get PPP and EIDL and use them for different purposes. PPP is designed primarily for payroll expenses. EIDL can pay working capital expenses the business would have been able to pay if the disaster had not occurred.

      However, the CARES Act also states in the section authorizing the emergency grant: (6) UNEMPLOYMENT GRANT.—If an applicant that receives an advance under this subsection transfers into, or is approved for, the loan program under section 7(a) of the Small Business Act (15 U.S.C. 636(a)) {NOTE – that section is PPP}, the advance amount shall be reduced from the loan forgiveness amount for a loan for payroll costs made under such section 7(a).

      If you don’t think PPP will be forgiven it may not be the right choice for your business. I can’t advise either way unfortunately. (You may also want to talk with your accountant about the Employee Retention Payroll Tax Credit. It might be a better option for your business. You can’t get it and PPP though.)

      We did write a fairly extensive story about PPP forgiveness here: How to Apply For Forgiveness for Your Paycheck Protection Program Loan

      1. I just got approved for both PPP and EIDL loans almost at the same time! But I’m really confused to how to go forward with them.
        1. I know that you can refinance your EIDL to the PPP if it was taken before April 3rd. What if the EIDL is after April 3rd (Like in my case)? Can I still refinance the EIDL into my PPP?
        2. Regarding the PPP forgiveness: Can you increase the payroll (Compared to when you applied for the loan)? Let’s say you had 1 employee with $6000 payroll (Total monthly payroll = $6000). If you increase the payroll to $10000, can it be counted towards forgiveness? Or the Total Payroll cap cannot be more than before?
        3. I know that there’s really no timeline for spending EIDL funds. But If it’s gonna be a separate loan from PPP, Can I cover payroll with PPP for the 4weeks period and then start using EIDL for the period after that?
        Really appreciate the advice

  20. Hello, I received 6000 from SBA for the EIDL, how do I know if that’s a loan or grant? I was also told from square that I was just approved for our PPP & funds (6,400) would be in my account 1-10 business days. Here is where I am really confused … From Square it says “if you received an EILD , a portion of the PPP loan equal to the EILD amount, will be sent directly to the SBA to fulfill EIDL obligation. The full loan amount you are approved for will remain outstanding with square at 1%” WHAT DOES THAT MEAN???

    1. Christy –

      Do you have 6 employees? If so then the $6000 was likely the EIDL grant. I would recommend you call the SBA Disaster Assistance hotline to confirm.

      As for the email from Square you’ll need to check with them.

      The CARES Act under the Emergency EIDL Grant section states that: (6) UNEMPLOYMENT GRANT.—If an applicant that receives an advance under this subsection transfers into, or is approved for, the loan program under section 7(a) of the Small Business Act (15 U.S.C. 636(a)) {OUR NOTE – That is the section that includes PPP}, the advance amount shall be reduced from the loan forgiveness amount for a loan for payroll costs made under such section 7(a).” So it appears that Square is subtracting the EIDL grant from the PPP for you. Again you’ll have to check with them.

  21. I keep reading all I can about this to be sure I understand it. One question I keep thinking though: what if you get the PPP loan and have it forgiven for payroll costs and also received the EIDL advance/grant and those funds were used for other expenses that were not payroll? Are they still going to deduct that from the forgiveness amount on the PPP?

  22. Hi is the time frame on the ppp 8 weeks from the time you receive the funds? I have seen quite a bit of contradicting info. The problem for some of us is our businesses are not yet open and giving people a paycheck when the business is not in operation is kind of useless. I
    I was hoping my businesses would be open by the time we received the money, but after Cuomo did his press conference today its not looking like we can open until possibly June 1st.
    Any comments or feedback is appreciated.

  23. Hi Gerri, are we allowed to accept both the EIDL and PPP? Given the PPP is a two year, the EIDL provides a greater runway with 30 years. Just curious if we are approved, can we have both?

    1. Shaun – EIDL can cover expenses that PPP doesn’t so you can apply for both. The general guidance is that you can’t use both for the same purposes. (And note EIDL is up to 30 years – you’ll have to see what the SBA offers you.) Good luck!

  24. I applied for the EIDL on March 29th. I have not heard anything back from them. We are a non-profit (Church and outreach community). I asked for 33K. Today, I recently noticed that the SBA has performed a credit check (Credit check was pulled on 4/25/2020- so just a few days ago). I was loosing hope (basically, thinking that my application was looked over or lost in a sea of applications). But after re-reading some of the comment here and on the SBA, I see that they perform a credit check. Should I assume that they are processing my application?

  25. I have been approved for my EIDL loan. When will I hear from somebody or anybody on when I can expect the funds. I have been waiting two weeks so far and no response(since being approved) I have never done this before and I am a nervous wreck and scared to death that I won’t get the money in time.

    1. I wish we could tell you William! You may want to call the Disaster Assistance hotline to see if they have any information. You can also try reaching out to your Senators or Representative in Washington – this is a federal program and it’s not unreasonable for you to let them know you need help navigating it.

  26. I applied for the EIDL prior to applying for the PPP. I did not get any type of confirmation of the EIDL from SBA. I received PPP funding after being told I had not been approved for the first round. Then a couple of days later I got a $10k deposit from the SBA. Now I’m not sure what funds I need to use for what to get the maximum forgiveness amount. Any suggestions would be appreciated.

    1. I’m so confused as to how you can spend this. I own two businesses, a beauty salon and a cattle ranch. The salon was shut down due to virus. The money I make at the salon pays for the operating loan at the ranch. Is this considered an acceptable expense? I qualified for an EIDL loan and have my application in for PPP. As a single, sole proprietor this has been really fun!

  27. I’m a gym owner and do not have employees. I applied for the EIDL on the first round of stimulus, but was told that I do not qualify because I do not have employees. I had to close my gym, but still have to pay rent and utilities. How do I get assistance with no employees? I even applied for a loan with my bank, but they were also asking for employee information that I can’t provide. I offered to provide my business taxes, but this was not acceptable.

    1. It sounds like EIDL might be a better fit for you but we are not sure if they will open it up to new applications with the new funding that Congress approved. We recommend you contact your elected officials in Washington.

  28. Can a company use the $$ from the PPP act as advance pay for employees and then reduce employees’ pay later?

  29. I applied for the EIDL/10K advance loan on April 11th. In this case, can I also apply for the PPP loan or not? Thanks!

  30. Hi, I am a independent contractor and recieve 1099 form. I applied for unemployment because I lost some of my customers due to the pandemic. Would I still be eligible for Economic Injury Disaster Loan Emergency Advance or the PPP?

  31. I am sorry to repeat the same question but still confused…..I am a sole-proprietorship small business owner. I had to closed down because of the covid-19. I applied for the PPP loan for my employees. Can I apply for the EIDL loan to help pay my rent?

  32. My computer only allowed me to darken 1 star. I wanted it to be 5 stars. Great article. Very helpful.

  33. Can a business apply for the EIDL and the PPP on the same day?

    If a small business (Less than 10 employees) use the PPP loan 100% for payroll, can the business use 100% of the EIDL for other operating expenses (rent, utilities, property insurance) and not deduct it from the PPP Loan?

    Please advise

    1. There’s no reason we know of why you can’t apply for both the same day. And it’s our understanding you can use funds for each program for different purposes as long as you aren’t double dipping.

  34. What happens if you apply for the EIDL loan and forget to check the box for the $10,000 advance and the business only has 4 employees?
    Will the business still receive the $4,000 advance that it qualifies for?
    What happens if the business submits two EIDL applications accidentally on the same day? Will the Loan get declined??

    Please advise

  35. I applied for the Covid Disaster Loan on April 3rd through the SBA site and have not heard anything from them yet. I read that it would only take up to three days then they would review and fund my account, but I haven’t received any information from them.

    Please advise.

    Thanks in advance!
    Anna C.

  36. As a 1099 employee, I applied for the EIDL. Do you know how they are determining how much you qualify for as your loan amount?

  37. Geri, Think I remember you from WBZ TV in Boston. I have been a menswear manufacturer’s representative since the early 70’s. I pay all my expenses, and travel throughout the Northeast and Mid Atlantic states, selling men’s tailored clothing to independent retail stores.I get paid strictly commission the month after clothing is shipped. Balances for my Spring 20 shipments and probably All of my Fall 20 business written by me Jan thru March will most probably not get made (fabric must be made and then finished product made in factories through out the world finally shipped from St Albans, Vt.) I could be out of my normal commission until 2021.

    This PPP vs EIDL up to $10,000 has me dizzy. I assumed I would only be eligible for the Grant, so I applied and got a confirmation. My options on the application were best described as wholesale, then import/export–I do not do. Other was Business Services-which one of my retail accounts said that would be best. Hope that was right. He with help from his wife a bank VP, said he applied for the PPP, which seemed to make sense. Should I have applied for the PPP too? I can not afford to pay back a loan. I have no employees. It is me–a 1099.

    This is all before I can apply thru the Commonwealth of Ma on Fri Apr 10th (?), for unemployment and the pandemic coverage of $600/wk. My CPA is “up to alligators” as he said in doing 2019 tax returns and knows nothing and my Fidelity Rep in Natick, Ma did not even know what EIDL or PPP is, and who to send me to.

    I am upset and have lost faith in these people. I hope you can advise me. Will I get the $10,000 and how long will it take to get deposited?

    1. David, I updated our FAQs article on EIDL. The grant is currently $1000 per employee so if you are the only employee it’s likely your grant will only be $1000 though you could get a loan for more. PPP vs unemployment is a tough one too. You’ll have to see how much you qualify for on PPP and also weigh whether you are likely to get the unemployment. I wish I could give a straightforward answer! This article on how to apply for PPP if you are self-employed may help a little too: Self-Employed: How To Apply For A Payroll Protection Program PPP Loan

  38. I’m confused on applying for both. Let’s say that on Friday, April 3 I applied for the PPP. Today I learned about the 10K EIDL advance and want to apply for it. Nothing in this article talks to that. Am I eligible for both?

    The article states “Specifically the legislation states that a borrower who has taken out an Economic Injury Disaster Loan for purposes other than payroll costs between January 31, 2020, and the date Paycheck Protection Program Loans are first made available are still eligible for a Paycheck Protection Program Loan as long as it is not used for the same purposes.”

    Everything I read states the dates between Jan 31 and April 3. What if you apply for the EIDL after April 3? What if you don’t want a loan from EIDL, but want the advance?

    Thank you!

    1. All the guidance we’ve received from the SBA is within the date range citing in the article. When you apply to the SBA for your EIDL, make them aware that you applied for a PPP loan on April 3, 2020.

  39. Assume a small business receives funds under the PPP program and the debt is successfully forgiven (covered payroll costs, rent, etc). Those covered payroll costs are only for the stipulated 8 week period. Can the small business apply for the EIDL grant and use those funds then to cover payroll costs subsequent to the 8 week period covered under PPP? In other words, you receive the PPP grant and use funds accordingly (primarily payroll for a stipulated 8 week period) so the debt is forgiven. If you have also received the EIDL funds – couldn’t those funds be used for payroll costs after the 8 week period and still be forgiven? I understand no double dipping but seems if this lasts for a longer period of time, both could be granted.

    1. Debbie – I have not seen guidance on this specific question. My best advice would be to ask the SBA Disaster Assistance hotline or contact your local Small Business Development Center.

  40. I have applied for the PPP loan. I work with Independent Contractors. Can I pay them with the loan proceeds if they’re also receiving unemployment?

    1. Hi Alice, so far as the PPP is concerned, Independent Contractors are not considered employees. The are able to apply for either unemployment benefits or their own PPP.

      Also, if you do have employees, you cannot pay them from the PPP at the same time they are receiving unemployment benefits.

  41. Hello I filled out a short info form basically to sing up for this .suppose to get a application at some point. I did not getany responce that they received the sign up form.Do you know how long till I hear something letting me know the application will be sent or any sort of correspondences .So I know they received my info.. Thank you much

    1. As you might guess, the volume of applications has created a backlog in our ability to quickly process them. Although I cannot give you a definite answer right now, we should have a timeline we can share in the next day or two. Thanks in advance for hour patience.

  42. I applied for the EIDL and EIDL Advance. When I applied for the EIDL, I included estimated payroll cost to the loan amount.
    Should apply for the PPP?
    The PPP form indicates that you can add the EIDL amount to the PPP, but I have not received the EIDL funds. Should I add the amount of the EIDL I applied for to the total PPP amount.

  43. I am getting some of the work done through independent contractors in addition to pay roll employees. While working out average monthly payroll,can I add amount of 1099 also with the amount of W2

  44. On the PPP loan. It says 2.5 x payroll. That just covers my pay. How do we get enough to pay business expenses? My pay covers my home and personal bills. This loan won’t cover all… correct? Not clear on how much to ask for. Thanks Joyce

  45. My organization is structed as a parent LLC with multiple subsidiary (disregarded) LLCs. Can each subsidiary FEIN apply for a separate EIDL?

    1. I don’t know the answer. I have heard SBA employees state that if you have multiple businesses each business can apply but will be subject to a total loan limit. For this one I would recommend you talk to someone from SBA Disaster Assistance or your local Small Business Development Center.

  46. Greetings,

    Thank you for this info. You have listed the information in a manner that can be easily understood.
    However, the link to the SBA portal for EIDL loans….is not working. “504” error.

    Also, I would like to note that I have scoured the SBA site, they offer the application for a loan advance, but there does not seem to be any distinction between that and an EIDL loan ( the one that is up to $2million). So….we are racking our brains on how to apply for ann EIDL loan….NOT THE LOAN ADVANCE.

    Also, the PPP loan sounds great…..but the banks will not deal with you if you have not had a relationship with them in the past ( i.e. a business account) and only ONE of them has a site ready as of yesterday…Bank of America. So the rest of us who were naive enough to take the experts advice as to the best banks for small biz ( i.e. Wells Fargo) etc are losing out as the PPP loans are first come first served.

    You might want to note that. Neither Bank of America ( of which I am a personal depositor) nor Wells Fargo ( commercial depositor) will take any applications for PPP unless you have been a prior commercial customer. Not sure what to do after that except to wait for Wells Fargo to get their act together.

    1. Thanks for the kind words! I’ll check the link. The advance is built into the EIDL application but you’ll note when you go through it online you don’t have to check the box stating you want to be considered for the advance. You can leave that blank. To your other question, we are aware that some banks are only offering these loans to existing customers. That makes sense from their standpoint when you consider how many applications they are getting. It’s easier to verify an applicant with whom they already have a relationship. At Nav we are working with multiple lenders to help match borrowers to lenders making these loans. You can fill out our Payment Protection Program loan form and we will notify you as those options become available.

  47. The EIDL grant does not happen in three days after applying. SBA phone reps are telling applicants that money will be sent three days after the loan is approved… and that things are so behind that the approval process might not start for some applicants until weeks from now. Yes the language in the law and on the SBA site claimed three days after applying but clearly nobody was ready for the wave that just hit them. We applied five days ago and have not heard a peep from anyone. It’s a failure to launch.

    1. I ‘second’ this comment.
      I applied over a week ago (the 2nd time I applied, as the first time was with the site that exposed information, and the SBA apparently just threw all of those applications in the trash), and have heard nothing. No request for more information, no loan advance, nothing. I’ve emailed them a couple of times and only received an automated response to go to the site to apply, or call them. I’ve called twice, and both times there were over 1,000 people waiting in the queue.
      Thanks to the author of the article for clearly spelling out what the intent is for each of the programs – but the implementation for sure doesn’t match the intent.

  48. Great article – thanks! I’m reading here and elsewhere that you can pursue both plans as long as the funds are used for different sorts of expenses:

    So it seems one could use the PPP strictly for — maintaining payroll and health insurance.
    And the EIDL strictly for — rent and “other obligations not able to be met due to revenue loss”. **
    Is that assumption correct?

    ** What precisely are these “other obligations” ??

    And – you wrote:
    “In addition, you must refinance an EIDL received through April 3, 2020 with a Paycheck Protection Program Loan.”
    So as of today – April 4 – is it still possible to pursue the EIDL (for non-payroll purposes) AND a separate PPP (strictly for payroll)?


  49. Does this need to be completed through NAV for the PPP if one is going through their bank? My bank did not know about Nav. They said that they’d call working down their list and and ask for the SBA Form 2483 (04/20) to be completed. Nav’s and the SBA form are the same thing. Very confusing.

  50. I am curious to know why I cannot claim my employee who has been on my payroll full time for over 2 years. She is paid very well and represents a significant portion of our payroll. I am told she can put a claim in for herself, but what good does that do me as an employer to keep her on the payroll? Wouldn’t the natural thing to do for a 1099 employee who has been granted the relief be to not work for three months? This creates the exact opposite of what I thought this program was for.

    Your comment are greatly appreciated.

  51. I own a small business and was told to close my doors on March 29 because I am nonessential. I had to let my employees go. Unemployment is a joke they can’t get through on the server but once they did they can’t get a confirmation or a check. I applied for the 10,000 grant to help with the rent and the utilities more than 3 days ago and have yet to hear anything. I am applying for the PPP but see that most of the money goes for payroll and my payroll is not that high so the 2.5 will not cover my basic bills. I applied for the SBA small business loan of 50K and I guess that will come through eventually. Before this started I had a business that was covering my expenses and I was not in debt and now in order to keep my business I have to go in debt because I was forced to close. I don’t think it is fair and I don’t see any real help out there. I am mostly angry because I have a flower shop and if they let me stay open I could have done no contact delivery taking orders via the phone and my website, but they wouldn’t listen. Thanks for listening.

  52. Can you kindly clarify where do you see on the legislation that it states an impacted business can’t apply the 50% qualified wage credit and get a PPP?

    1. In the CARES Act it states: (j) Rule For Employers Taking Small Business Interruption Loan.—If an eligible employer receives a covered loan under paragraph (36) of section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as added by section 1102 of this Act, such employer shall not be eligible for the credit under this section

  53. I want to clarify the last comment I think you were incorrect. The PPP loan will be forgiven or most of it by retaining OR rehire your employees and must be for payroll and pay some overhead expenses thru June 30. You must rehire all of them and not reduce their wages. It does not mean to retain the current payroll while you are closed.

  54. The PPP says you can only use for expenses incurred after the loan is funded. We kept our employees on payroll with the understanding we will be able to recoup this amount paid to employees before the loan funding. What is the straight scoop on this? Otherwise we would have put them on unemployment if we had known. Maybe I am just not understanding how it works.

    1. Corey – I updated the FAQs yesterday with the latest information we have. The way I read the legislation is you get the loan, keep paying employees then apply for forgiveness for payroll and other qualified expenses for the eight weeks after you get the loan. (See in the update where it says non-payroll costs can’t be more than 25% of loan.)

      I’m not an attorney and we don’t want you to rely on this comment or any information in this article to make employment decisions. If you want to check it for yourself, you can find the text of the CARES Act here. Just search for “forgiveness.” We will update this article as more information becomes available.

    2. Corey

      I have the same concern, Do you have any futher clarification on this particular funding timing issue you wrote about? I am in the EXACT same boat (kept my employees on payroll since I thought it would be reimburse from PPP funds (I had assumed my out of pocket would be retroed back to BEFORE the loan) not FROM the loan date forward….. it feels like the right thing to do ethically for my staff might cost me all the payroll for a few weeks BEFORE I get the loan (if I get it) I cannot afford this and will have to furlough them if this is the case

      Anyone else know the specifics on this?

  55. Regarding self-employed. Typically the money taken out of te business is not reported on a W-2 nor is it reported on a 1099-Misc. This is money taken from the cash flow of the business. It will be reported on Schedule C as income. But this ‘owner’ is neither and employee (W-2) or an independent contractor (1099-Misc). So there is no designation on the applications to handle this income to the self employed person (the owner). But it is really his paycheck and should be intended to be covered in the ACT.

    1. Well stated Steve. As an SBDC representative, I have received this question…hundreds of times. Bankers have been seeking clarification with this issue as they begin to determine the loan amount to be issued. The Self-Employed Proprietor, Independent Contractor, and LLC Owners are in need to have this clarified. Also note, this issue also impacts the filing of Unemployment, and state Workforce Development offices do not have the newly stated rules.

      It’s frustrating the attorneys who are drafting the legislative rules are unaware of these IMPORTANT issues; the recent US Small Business Administration Interim Rule (31 pages of legalese jargon) FAILS to define this issue…

    2. How is the owner covered in the act? Is there a way the owner can claim pay in the PPP loan app even though he is either 1099 or w-2?

    3. Do you have any updates to your post? i cannot find anything that addresses guaranteed payments to owners for a LLP firm. I included Principals on the PPP application but haven’t heard if they will allow this. Do you know of any recourse for owners in my position?

    4. We have the same question. Two of own the business self employed. Mandatory shut down and we have no income to pay the rent/operating expenses. Are we qualified to receive the EIDL?

  56. Has anyone received $10,000 emergency grant?

    I filled out online application on the new portal Monday 3/30/20.

    So I was able to provide banking information.

    Btw, this website has been a great resource for me.

    Thank you!

      1. Let’s say we have $20K for PPP approved and $4K for EIDL. Can we use $24K for payroll over 8 weeks?

        1. Did you get the EIDL grant (the $4000)? If so it is our understanding that amount must be subtracted from the forgiveness amount for PPP per the CARES Act. It would be a good idea to check with your tax professional about your specific situation.

        2. As a 501c3 organization treasure I applied for eidl and was granted an advance. Haven’t heard about the loan yet. As an all volunteer program how does this affect the grant and loan forgiveness

          1. I’ve received funding for my EIDL and am reading the Loan Agreement carefully.

            I do not see much restriction on the use of these funds other than they must be for business and not personal.

            I could have sworn I saw something previously about fixed assets or expansion purchases not being allowed.

            One thing I was planning to purchase this spring was an outbuilding for equipment storage (placed on my residential property, I work from home) but no income put that on hold.

            Can I make this purchase legally with these funds?