Coronavirus Pandemic Disaster Loans Comparison
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Developed by America's SBDC
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AS OF 7/6/2020
SBA Coronavirus Pandemic Disaster Loans
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PPP SBA 7a
(Paycheck Protection Program)
Economic Injury Disaster Loan
(EIDL)
EIDL Forgiveness/Advance
(grant up to 10K)
SBA Express Bridge LoanSBA ExpressSBA Small Business Debt Relief Program
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StatusOpenOpen. Loans are being limited to $150,000.Open..OpenOpen. On 5/7/2020 SBA Express maximum loan amount temporarily increased to $1,000,000 through December 31, 2020. For all SBA Express loans to veteran-owned small businesses approved on or after March 27, 2020, the upfront guaranty fee will permanently be zero.
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Eligibility• Self-employed individuals, independent contractors, sole proprietors, and businesses, Tribal business concerns and private/501(c)(3) non-profits with 500 or fewer employees in operation as of February 15, 2020.

• Businesses in certain industries can have more than 500 employees if they meet applicable SBA employee-based size standards for those industries. SBA size standards are based on either “Size standards in millions of dollars” or “Size standards in number of employees”.

• Businesses listed under “Sector 11 – Agriculture, Forestry, Fishing and Hunting” are based on “Size standards in millions of dollars” and maxed at $1,000,000.

• Affiliation standards are waived for small businesses in the hotel and food services industries (NAICS code beginning with 72); or that are franchises in the SBA’s Franchise Directory; or that receive financial assistance from small business investment companies licensed by the SBA.
Self-employed individuals; independent contractors; sole proprietors; and businesses, Tribal business concerns, ESOPs, cooperatives, private/501(c)(3) non-profits and 501(c)19 non-profits with 500 or fewer employees.Self-employed individuals, independent contractors, sole proprietors, and businesses, Tribal business concerns, ESOPs, cooperatives and private/501(c)(3) non-profits with 500 or fewer employees; must have been in operation as of January 31, 2020.Any business in operation before March 13, 2020, that has fewer than 500 employees or otherwise meets the SBA’s existing Size Standard (predicated or NAICS code and annual revenue). Credit not available elsewhere.Business must operate for profit; must engage in operations within the USA, should be in operation for at least 2 years; must qualify as a small business according to SBA size standards; must be able to prove/show a need for financing; business owner must have already financed the business through alternative means; must be able to show that funds will be used for sound business purposes.7(a) loans not made under the Paycheck Protection Program (PPP), 504 loans, and microloans. Disaster loans are not eligible.
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LenderSBA-certified Bank or Credit UnionSBA SBASBA-certified Bank/Credit UnionSBA-certified Bank/Credit UnionBorrower's current SBA-certified lender
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ApplySBA-certified LendersOnline: https://covid19relief.sba.gov/#/ Part of EIDL loan app: https://covid19relief.sba.gov/#/SBA-certified lender that has an existing banking relationship with applicant as of 3/13/2020. SBA-certfied LenderDebt relief is automatic, but you should check in with your lender
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TermUp to 5 yearsUp to 30 yearsn/aMaximum of 7 years. Must be structured as a term loan, not a revolving LOCLoan maturities are based on the ability to repay, the purpose of the loan proceeds, and the useful life of the assets financed. The maximum maturities for SBA loans are as follows: 25 years for real estate; 10 years for equipment; 10 years of working working capital or inventory loan.SBA will cover all loan payments on these SBA loans, including principal, interest, and fees, for six months
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Amount250% of average monthly payroll from the past year capped at $100K per employee, up to a maximum of $10M. Only employees with a principal place of residence in the U.S. count toward eligibility and calculation of the PPP loan amount.Originally set at up to $2M, but could be capped at $150,000 according to the Washington Post (5/8)$1,000 per employee up to a maximum of $10,000up to 25K$1,000,000 maximum
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Interest Rate1.00%3.75% for businesses, 2.75% for non-profitsn/aNot to exceed Prime + 6.5%, fixed or variableNot to exceed Prime + 6.5%, fixed or variablen/a
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Security/CollateralNoneUnsecured up to 25K; loans of over 25K will need to give the SBA access to collateral, that does not mean that you need to have your loan fully collateralized, but if you have collateral it will be used.n/aNoneLenders are not required to take collateral for loans up to $25,000; may use their existing collateral policy for loans over $25,000.n/a
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Personal GuaranteeWaivedNo personal guarantee for loan amounts up to $200Kn/an/an/a
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Payment DeferralPayments of principal, interest and fees are deferred to the date that SBA remits the borrower's loan forgiveness amount to the lenders, or if the borrower does not apply for loan forgiveness to 10 months after the end of the borrower's loan forgiveness covered period.1 year; interest will continue to accrue over this periodn/an/an/a
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Turn Around2 weeksSBA says 3-6 weeks3 business days - this did not occur during the week of 3/30-4/3within 45 days of approval, and no later than 90 days36 hours
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ForgivenessUp to 100% as long as loan proceeds amount spent by the borrower during the 24-week period after the origination date of the loan is used for: minimum of 60% on payroll costs; and up to 40% on interest payment on any mortgage incurred prior to February 15, 2020, payment of rent on any lease in force prior to February 15, 2020, and payment on any utility for which service began before February 15, 2020. Employee and compensation levels must be maintained and payroll cost capped at $100,000 on an annualized basis for each employee. Covered period is until December 31, 2020.
Employees must be rehired by December 31, 2020 in order for their salaries and wages to count toward payroll costs. Safe harbor if the business can document their inability to hire employees for unfilled positions by December 31, 2020 or their inability to return to the same leve of business activity because of federal Covid requirements pertaining to social distancing, sanitation and worker safety.
Any advance amount received under the Emergency Economic Injury Grant Program used for payroll costs will be subtracted from the amount forgiven.
NoneApplicants shall not be required to repay advance payments, even if subsequently denied for an EIDL loan.May be repaid in full or in part by proceeds from an EIDLn/aSBA pays the principal, interest, and any associated fees owed on all 7(a) and 504 loans in regular servicing starting with the next payment due for existing and new borrowers. Existing loan - 6-month payment relief begins with the next payment due; Existing loan on deferment - 6-month payment relief begins with the next payment due on the loan after the deferment period ends; New loans made within six months of 3/27/2020 - 6-months of payments beginning with the first payment due on the loan
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FeesNoneNoneNoneUpfront guaranty fees: Not more than 2% of the guaranteed portion of a loan if the total amount of the loan (maximum of $500); Annual service fee: no more than 0.55% of the outstanding balance of the guaranteed portion of the loan; Application fee: the greater of 2% of loan amount or $250; Late payment fee: not to exceed 5% of scheduled paymentUp to 3.5%; for all SBA Express loans to veteran-owned small businesses approved on or after March 27, 2020, the upfront guaranty fee will permanently be zero.
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Loan Availability PeriodFebruary 15, 2020 - August 8, 2020January 31, 2020 – December 31, 2020January 31, 2020 – December 31, 2020March 13, 2020 - September 13, 2020Maximum loan size increased to $1,000,000 through December 31, 2020.Thru September 27, 2020
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UsageEmployee salaries and benefits (including paid sick or medical leave, insurance premiums) and mortgage interest (not principal), rent, and utility payments for 8 weeks following disbursement of the loan.Pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. It does not cover lost sales.Providing paid sick leave to employees, maintaining payroll, meeting increased costs to obtain materials, making rent or mortgage payments, and repaying obligations that cannot be met due to revenue lossesWorking capital to be used to cover operational expenses to support the survival, or the reopening of the business.Real estate, equipment, working working capital or inventorySupport the survival and/or reopening of the business
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ProhibitionsBorrower cannot have pending application for an EIDL or 7(a) loan for the same purpose.Cannot be used to pay off existing debtBorrower may obtain only one EBL.
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Loan InteractionIf you received an EIDL loan related to COVID-19 between January 31, 2020 and the date at which the PPP becomes available, you would be able to refinance the EIDL into the PPP for loan forgiveness purposes. However, you may not take out an EIDL and a PPP for the same purposes. Remaining portions of the EIDL, for purposes other than those laid out in loan forgiveness terms for a PPP loan, would remain a loan. If you took advantage of an emergency EIDL adance (grant) award of up to $10,000, that amount would be subtracted from the amount forgiven under PPP.
A PPP loan must me used to refinance the full amount of an EIDL when the PPP borrower received funds from EIDL from January 31, 2020 through April 3, 2020; and the PPP borrower used the EIDL funds to pay payroll costs. The amount of the EIDL loan to be refinanced does not include the amount of any EIDL “advance” (also referred to as an EIDL “grant”) received by the PPP Borrower, because the EIDL advance does not need to be repaid.
If you get a disaster EIDL loan , and then use it to pay payroll, mortgage and utilities, only to come back in a month and apply for the PPP loan you can’t get forgiven for those costs you’ve already covered under an EIDL. An EIDL Loan may not be refinanced with a PPP loan when the PPP borrower received the EIDL before January 31, 2020 or after April 3, 2020. An EIDL Loan is not required to be refinanced with a PPP loan when the PPP borrower received funds from an EIDL loan from January 31, 2020 through April 3, 2020; and the PPP borrower used the EIDL for purposes other than payroll costs. If you applied for the EIDL before 3-29-20, you will have to re-apply for the 10K. Appications after 3-29-30 include option to request 10K advanceWill be repaid in full or in part by proceeds from the EIDL loanBorrower may separately apply for and take out a PPP loan, but debt relief will not apply to a PPP loan.
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Notes:Business must have been operational on February 15, 2020, and had employeesOK for business to be less than 1 year oldCan get grant even if don't qualify for EIDL loan
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Eligible payroll costs do not include compensation above $100,000 in wages, but pay up to $100,000 for an employee is included.Loans can be made based solely on credit scores
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Owner draws, distributions, amounts recorded on a K-1 are not eligible payroll costs
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Only employees with a principal place of residence in the U.S. count toward eligibility and calculation of the PPP loan amount.
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Affiliation standards are waived for small businesses (1) in the hotel and food services industries (click HERE for NAICS code 72 to confirm); or (2) that are franchises in the SBA’s Franchise Directory (click HERE to check); or (3) that receive financial assistance from small business investment companies licensed by the SBA.
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Loan forgiveness is not treated as taxable income.
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Business expenses covered by PPP forgiven loan proceeds are not eligible for tax deductions
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SBA FAQs
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Guidelines for Sole Proprietors & Independent Contractors begin on page 4: https://home.treasury.gov/system/files/136/Interim-Final-Rule-Additional-Eligibility-Criteria-and-Requirements-for-Certain-Pledges-of-Loans.pdf
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Employer payroll taxes for Social Security are delayed until January 1, 2021.
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Loan Calculator
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Documentation for Sole Proprietors, Independent Contractors, Self-EmployedDocumentation demonstrating that was in business as of 02/15/2020 may include payroll processor records, payroll tax filings, or Form 1099-MISC, or income and expenses from a sole proprietorship. For borrowers that do not have any such documentation, the borrower must provide other supporting documentation to its lender, such as bank records, sufficient to demonstrate the qualifying payroll amount.

Documentation options for payroll tax filings include the following: IRS Form 941 (quarterly wages); IRS Form 944 (calendar year wages); State income, payroll and unemployment insurance filings; QuickBooks; bank repository accounts; and/or internally generated profit and loss statements. However: Nonprofit organizations must include IRS Form 990; Sole proprietors must include IRS Form 1040 Schedule C; Any entity that filed IRS Form 1099-MISC must include this form; Seasonal employers must document the period beginning February 15, 2019 through June 30, 2019.
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Strategic ConsiderationsIf you have already laid off employees, you should be sure they will come back prior to accepting the full loan. In order to be fully forgiven, you must maintain full payroll. Employees may be collecting new unemployment benefits that provide an increase in pay.
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While you cannot "double dip," (i.e. use the proceeds for the same expenditures), small businesses should consider applying for both the PPP and EIDL loans simultaneously. You can always decline the EIDL.
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