As a nice summary, a bank put together a great side-by-side comparison chart of these two loans

This is usually the main intent of a a SBA ’emergency loan’ — a loan to get your business back up and running in times of an emergency

In addition to reading the information below and reviewing the below links, also analyze the chart, and print it to see which program (or both) you may qualify for by clicking the link below:

This takes a bit longer to apply for and the SBA determines how much you qualify for (prior to 48 hours ago, that is – more below on that). It’s designed to help you overcome injury due to COVID 19. (Example: If your revenue has stopped and you need funds to pay

expenses to get opened back up soon, you’ve been “injured!”). As of a couple of days ago, they streamlined this application, and it does not take as long now to apply for it (initially that is, because they will likely come back to you for more information afterwards). This new streamlined loan process was put in place so those that apply can get their hands on the first $10,000 ‘Free GRANT Money’ as soon as possible (see more about that below). There’s a very long term for repayment and no payments for a year.

There is also a $10,000 GRANT that will be offered (per request) within 3 days of application acceptance that is not required to be paid even if your loan is denied.

However, this restructured EIDL SBA emergency loan is different than others in the past

With the EIDL here’s no truing up of payroll, etc. (like there is with the PPP, below). It can be used for operating the business and paying many types of expenses (see instructions on EIDL site for information of expenses that this can be used for – it is very non-restrictive). This quick GRANT feature is out there to help you pay expenses quickly if your revenue has suddenly stopped or slowed — before the rest of the loan is approved and completed.

Some clients want a loan above the $10,000 EIDL GRANT, and not just ‘Free GRANT Money’, so they are interested in getting a loan with this over the $10,000 initial GRANT. This could be a nice small business loan to have as the rate is 3.75% for up to 30 years. Mostly, because the SBA does not normally have this GRANT option, during emergencies, until now.

So, here is one the first helpful link for information from an article recently published on the PPP loan. I recommend reading ALL of my links on this — there are five (5) PPP loan links to read in this section. This article, my below information and other links, seem to answer almost ALL of the most asked (and difficult) questions from our clients (as of now, until something else changes). I recommend printing the below links and taking notes on them.

This PPP loan is the loan which MAY UNDER SPECIFIC CIRCUMSTANCES be forgiven (turned into a GRANT) if used AT LEAST 75% FOR PAYROLL before June 30. If not forgiven, the loan is turned into a term of up to 10 years at up to 4% interest.

This was new information that we didn’t have until the past 48 hours. The forgiveness is also reduced by pay reductions in excess of 25%. This calculation means that THIS IS NOT ‘FREE GRANT MONEY’ just because you pay any amount of payroll. It’s designed to bring back your workforce at least 75% between now and June 30 in order to be forgiven. This will be calculated based on future employee numbers and payroll amounts DURING THE PERIOD EXPLAINED PRIOR TO JUNE 30. Basically, only get this if you are going to continue to pay employees at a rate similar to the past, or it will turn into a ten year loan, payable back to the SBA.