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The original item was published from 4/7/2020 2:20:55 PM to 5/9/2020 12:00:03 AM.

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Economic Development

Posted on: April 7, 2020

[ARCHIVED] Small Business Loan Programs Update, Regarding COVID-19 Response

Business Development

– Small businesses may apply for both of the EIDL and the PPP loan offerings through the Small Business Administration, but only PPP may be used for payroll if you apply for both.


Economic Injury Disaster Loan for COVID-19 – (EIDL)

As a review, the EIDL – Economic Injury Disaster Loan for COVID-19, is a loan for small businesses for up to $2 million to help meet financial obligations. These loans may be used to pay fixed debts, payroll, accounts payable and other operating expenses. The interest rate is 3.75 for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%. The loans offer long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.

The EIDL has a possible advance of up to $10,000 that is based on the number of employees you have ($1,000 per employee), and currently the SBA is saying businesses will not have to repay the advance. However, the portion of the advance that is accepted will be deducted from the non-repayment portion of the PPP Loan, if that is also utilized.

Apply for the EIDL – Live link is:

Paycheck Protection Program – (PPP) 

The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.

The SBA will forgive loans if all employees are kept on the payroll for eight weeks, and the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels.  Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

Employers can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program. You can also search by zip code for lenders in your area on the US Treasury’s website.

Search for a lender by zip code – Live link is:

This loan has a maturity of 2 years and an interest rate of 1%.

The Paycheck Protection Program will be available through June 30, 2020.

Employers and lenders may visit the U.S. Department of the Treasury’s website at for more information and loan applications.

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