Loan Application process

All the information you need to get started on the COVID-19 Relief Loans Application (only for the United States of America)

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Does your US-based business need an infusion of cash to make it through these challenging times? Don’t worry. Whether you’re a business of several hundred people, a small nonprofit, or even a solopreneur, you have options and we’re here to help you understand them. The Pitch Deck Services team has simplified information about two important but confusing Federal loan programs to help you make an informed decision and get you back to doing what you do best—running your business.

On March 19, 2020, the Small Business Administration (SBA) launched the Economic Injury Disaster Loan Assistance (EIDL) program for U.S. small business owners, aimed at providing aid to businesses affected by the Coronavirus pandemic.

A little over a week later, on March 27th, 2020, the president signed into law a historic $2T Coronavirus Aid, Relief, and Economic Security (CARES) Act, a stimulus bill that includes a loan program to keep small businesses up and running during mandated COVID-19-related closures. The CARES Act includes a Paycheck Protection Program (PPP) which authorizes $349 billion of federally guaranteed loans to qualifying small businesses.

There are pros and cons to each of these programs, so it’s important to understand both before moving forward. For example, it only takes a few minutes to apply for an EIDL loan and you can get up to $10,000 quickly—in as little as 3 days and businesses will need to repay the loan in full.

On the other hand, while the PPP is available to a wider range of business owners, it will take a bit longer to get the money in your hands. That said, if used in accordance with the SBA’s guidelines, these loans will be 100% forgiven. In other words, the loan balance will disappear, which is pretty attractive to most business owners.

It’s important to note that businesses cannot open EIDL and PPP loans at the same time. However, you can apply for both loans and decide what to do once you’re approved. If you apply for the EIDL loan—including the expedited $10,000 advance—and then find out later that you qualify for the PPP loan, you can likely refinance the EIDL loan with the PPP loan. You’ll just need to discuss your plan with the lender. Just keep in mind that these loans are limited to one per Taxpayer Identification Number.

Whatever you decide, barriers for approval should probably be relatively low, as the U.S. Federal government’s stated purpose is to get cash in the hands of employers (even employers of one).

Economic Injury Disaster Loan Assistance (EIDL)
vs. CARES Act Paycheck Protection Program (PPP)

Who is eligible?
EIDL—Small businesses with fewer than 500 employees and $35 million in revenue.
PPP—Small businesses with fewer than 500 employees; self-employed, sole proprietors, freelancer and gig workers, restaurants, and hotels; and 501(c)(3) nonprofits, with fewer than 500 workers.

Who lends the money?
EIDL—The U.S. federal government, via the Small Business Administration.
PPP—Any bank or credit union that provides SBA-guaranteed loans. There are thousands. Call your bank first.

How do I apply?
EIDL—You can apply online now. Plan to spend a few hours completing this process.
PPP—Start by calling the bank you already work with. They might be able to help or direct you to an approved lender.

Are these grants or loans?
EIDL—This is a loan.
PPP—This is a loan, but if the funds are used for payroll and operating costs as outlined by the law, the debt can be forgiven.

How much can I borrow?
EIDL—Up to $2M, based on needs.
PPP—Applicants can also request an expedited loan advance of up to $10K, which should be available within 3 days. Up to $10M, based on needs.

What’s the interest rate?
EIDL—2.75% – 3.75%
PPP—Less than 4%

What can I use the money for?
EIDL—Financial obligations and operating expenses that would have been met had COVID-19 closures not occurred.
PPP—Payroll costs including salaries, healthcare benefits, and insurance premiums; interest on mortgages; rent on any lease in force prior to February 15, 2020; and utility payments.

Do I need collateral?
UEIDL—Your business assets will serve as collateral. The SBA will place a lien against the business.
PPP—No collateral is required from the business or its owners.

Would you like to start your application for the ultimatum? At Pitch Deck Services, we can help you (solopreneurs and small businesses owners) with our specially discounted services. Head on the start your project now!

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