Economic Injury Disaster Loan (EIDL) Funding
In response to the Coronavirus (COVID-19) pandemic, small business owners, including agricultural businesses, and nonprofit organizations in all U.S. states, Washington D.C., and territories can apply for an Economic Injury Disaster Loan. The EIDL program is designed to provide economic relief to businesses that are currently experiencing a temporary loss of revenue due to coronavirus (COVID-19).
Applications are open now through the Small Business Association. To get more details and a link to the application please click here.
Please note these are loans and do have a deferred payment for the first year.
Paycheck Protection Program 2 (PPP2) Funding
The second round of funding opens January 11. Applicants that received funds in round two can apply again for this second round. Also, those who did not apply in round one can apply through this round. Please note there are a few changes tot he program as outlined below. To apply contact your local bank.
The second round of PPP loans is similar to the first, with several important differences. Highlights include:
- A total of $284 billion is available to first- and second-time eligible borrowers, through May 31, 2021.
- Eligible first-time borrowers include: businesses with 500 or fewer employees that are eligible for other U.S. Small Business Administration (SBA) 7(a) loans; sole proprietors, independent contractors, and eligible self-employed individuals; not-for-profits, including churches; accommodation and food services operations with fewer than 300 employees per physical location.
- Loan amounts: 2.5 times monthly payroll costs (3.5 times for accommodation and food service employers classified in North American Industry Classification System Code 72), with a maximum amount of $2 million.
- Payroll costs include group life, disability, vision, and dental insurance costs.
- Organizations drawing a second PPP loan must have fewer than 300 employees (or less than 500 for accommodation and food service employers classified in NAICS Code 72), must have used or will use the full amount of their first PPP loan, and have experienced a 25% decrease in gross revenue in any 2020 quarter compared to the same quarter in 2019.
- The loan coverage period is flexible – recipients may choose any timeframe between 8 and 24 weeks.
- Forgivable costs have expanded to include certain operating expenses, property damages from public disturbances, supplier costs, and worker protection (PPE).
- Shuttered Venue Operator Grants, totaling $15 billion, are available to live venues, independent movie theaters, and cultural institutions. These funds, however, can’t be used in conjunction with PPP funding.
- Economic Injury Disaster (EIDL) loan advances are no longer deducted from PPP loan forgiveness. In addition, $20 million is allocated for EIDL advances through Dec. 31, 2021.
- Business expenses paid with forgiven PPP loans are tax-deductible, superseding disputed IRS guidance that such expenses could not be deducted.
- Forgiveness applications for loans under $150,000 will be simplified to a one-page certification, similar to the EZ forgiveness application previously provided.
Applications can be made through your bank or CFI now. In the meantime, it’s a good idea to talk with your financial advisor, assess your financial situation to determine whether applying for a first or second PPP loan is the right choice, and prepare the necessary documentation if you’re going that route.