July 24, 2020 | Last Updated on: July 22, 2022
As of May 28, 2021, the Paycheck Protection Program has run out of funding. You can learn more about the PPP with our COVID-19 resource hub.
When the pandemic started, the Economic Injury Disaster Loan (EIDL) program aimed to help small businesses navigate financial hardship caused by the coronavirus pandemic in a variety of ways—including the EIDL Advance program. EIDL Advance provided small businesses owners with grants, in the form of a loan advance, of up to $10,000 ($10,000 was the maximum grant amount; small business owners could apply for a loan advance of $1,000 per employee for up to 10 employees—for a maximum of $10,000). And because that money was considered a grant, businesses were not responsible for repaying the funds, making them an attractive relief option, particularly for business owners concerned with how the economic slowdown would impact their businesses in the long term.
The EIDL Advance program was funded when Congress passed the Coronavirus Aid, Relief, and Economic Security Act (more commonly known as the CARES Act), which allotted $10 billion to support the program. But on July 13th, the EIDL Advance Grant program depleted its funds—and, as such, is no longer operational or available for small businesses.
But just because the EIDL Advance grant program has ended doesn’t mean small businesses are out of options! Let’s take a look at the COVID-19 relief options still available for small business owners:
Arguably the most well-known coronavirus aid program is the Paycheck Protection Program. The Paycheck Protection Program is a loan program administered by the U.S. Small Business Administration, which initially oversaw $350 billion in small business loans. But after those funds were depleted in less than two weeks, Congress passed additional legislation that replenished the program with $310 billion in additional funding to disperse in PPP loans.
The biggest draw of PPP loans is that up to 100% of the total loan amount is eligible for loan forgiveness if the loan proceeds are spent on approved expenses, including payroll costs, mortgage interest, rent, and utilities, during the covered period—which was originally 8 weeks after loan origination, but was extended to 24 weeks with the passing of the Paycheck Protection Program Flexibility Act (PPPFA). Recipients of PPP loans can also defer 50% of their 2020 payroll taxes to December 2021, which creates an additional tax benefit for business owners.
In order to qualify for a Paycheck Protection Program, you must meet the following eligibility criteria:
If your business meets the eligibility criteria, you can apply for a PPP loan directly through any approved SBA lender.
The SBA EIDL Advance program may have ended—but that doesn’t mean the program is through providing disaster assistance to small businesses. The EIDL program is still accepting new applications.
The EIDL program is a disaster loan program administered through the U.S. Small Business Administration that provides financial assistance to small businesses facing economic hardship as the result of the disaster—for example, the COVID-19 pandemic. Qualified businesses may apply for low-interest loans to cover a variety of working capital needs (like payroll or fixed debts).
Unlike loans through the Paycheck Protection Program, EIDL loans aren’t eligible for loan forgiveness. But they do have more generous loan terms than traditional financing options, including a 3.75 percent interest rate and repayment terms of up to 30 years—so, if given the choice between an EIDL loan and a traditional small business loan, moving forward with the EIDL option could save your business a significant amount of money in the long-term.
In order to qualify for an EIDL loan, you must meet the following eligibility criteria:
If your business meets the eligibility criteria, you can apply for an Economic Injury Disaster Loan through SBA.gov.
The 7(a) program is the SBA’s primary program and offers a variety of small business loans for business owners in need of funding to keep their businesses moving forward—and that includes during the coronavirus pandemic.
There are a variety of SBA loans available through the SBA 7(a) program, including:
Terms and conditions vary based on loan type, but maximum loan amounts range from $350,000 to $5 million.
In order to qualify for a loan through the SBA 7(a) program, you must meet the following eligibility criteria:
If your business meets the eligibility requirements, you can apply for an SBA 7(a) loan through an approved SBA lender.
If you need coronavirus relief funds to cover costs for fixed assets, the SBA 504 loan program could be a good option. The 504 loan program provides long-term, fixed-rate loans (to a maximum of $5 million) for small businesses to acquire the fixed assets they need for expansion or modernization, including real estate, machinery, or other equipment.
In order to qualify for a loan through the SBA 504 program, you must meet the following eligibility criteria:
If your business meets the eligibility requirements, you can apply for a 504 loan through Certified Development Companies (CDCs), a network of approved SBA lending partners.
If you have a preexisting relationship with an SBA Express Lender, you can apply to get fast access to up to $25,000 in funding through the Express Bridge Loan Pilot Program. This lending program was designed to “bridge the gap” and get businesses the immediate funding they need while exploring other funding options.
In order to qualify for an SBA Express Bridge Loan, applicants must meet the following eligibility criteria:
If your business meets the eligibility requirements, you can apply for an SBA Express Bridge Loan directly through your SBA Express Lender
