All you Need to Know about the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (
All you Need to Know about the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL).
The Trump administration announced a $349 Billion Relief Package for small businesses that are being impacted by the effects of the coronavirus. Many are having to close their doors to prevent the spread of the virus. This situation, in turn, has led to companies having to reduce the hours of workers or even let them go altogether.
The Relief Package Program is a Part of the Coronavirus Aid Relief and Economic Security (CARES) offered in Government - backed Forgivable Loans to help Small Businesses continue paying payroll costs and certain operating expenses.
If you're a Business Owner, these are Two (2) Main Options, that are available for Small Businesses and Non- Profits to obtain financial support during the coronavirus outbreak. They are:
CARES Paycheck Protection Program (PPP)
Economic Injury Disaster Loan Program (EIDL)
Paycheck Protection Program (PPP) Loan:
The Paycheck Protection Program (PPP) Loan is dedicated to guarantee Businesses, the loans they need to cover 8 Weeks of Payroll Expenses, along with some Utility and Rent Costs, as well as Payments of Interest on any Mortgage Obligation. Businesses will have to maintain Payroll fully for the Next 3 Months. It is important to note that the Loans can be fully forgiven, if the Businesses keep employees on Payroll or re-hire them by June 30th.
Important Facts about PPP:
To Apply for this Loan, Businesses can request 2.5 times their Average Monthly Payroll Costs. The Average Costs is based on the Total Payroll Costs for the Year 2019.
Organizations can apply for the Paycheck Protection Program (PPP) by calling their Banks and Other Lenders directly after completing the Form/Link below on the SBA Website:
The Paycheck Protection Program (PPP) Loan is forgivable, depending on whether Businesses lay off workers and how they use the Money.
Repayment of Loans are deferred for 6 Months, with an Interest Rate of 0.50 % Fixed Rate and the Maximum Repayment Term is 2 Years.
Economic Injury Disaster Loan Program ( EIDL)
The Loan Request Amount will be based on the Amount of " economic injury" that you have sustained, because of the COVID-19 Pandemic.
The EIDL Loan can be used for a Broader Array of Costs, including Rent and Mortgage Payments, Salaries, Workers' Paid Leave and the Business' Operational Needs.
Organizations can apply for the Economic Injury Disaster Loan Program and Advance(EIDL) directly through the SBA Website Link below:
Once you submit your Application for the Loan, you can indicate that you are interested in the emergency Grant at the same time. Businesses who request for this Grant Advance, when approved will not need to pay it back, but the rest of the Disaster Assistance Loan will need to have to be repaid.
Repayment of Loans are deferred for 6 Months, with an Interest Rate of 3.75% Rate for Small Businesses and 2.75% Rate for Non-Profits. The Maximum Repayment Term is 30 Years.
No Collaterals or Personal Guarantees is Needed for the Application for each of these Loans. However, if the Proceeds are used for fraudulent purposes, the United States Government will pursue criminal charges against the Business/Organization Owner.
One can apply for Both Loans, if you need to, but you cannot use both Sources of Funds for the Same Purposes.
The $10,000 grant is a Loan Advance and does not need to be paid back, BUT If you also apply for the Paycheck Protection Loan Program, the $10,000 will be subtracted from the Loan Forgiven Amount, under the Program.
If you apply for both Loans, it is advisable to let your PPP Lender/Banker, know that you have applied for the EIDL Loan.
To get the Average Monthly Payroll Costs for the PPP Loan, it is advisable to use the Average of the last 12 Months' Payroll Costs. For New Businesses/Organizations, use the January - February 2020 Payroll Costs.
You need to provide the Lenders, documentation that verifies the Number of Full Time Equivalent Employees on your Payroll Costs, Covered Mortgage Interest Payments, Rent Payments and Covered Utilities for the 8 Weeks Period, once the loan is Granted.
The Loan Forgiveness will be based on the Sum of the Documented Payroll Costs, Covered Mortgage Interest Payments, Covered Rent Payments and Covered Utilities Documentation Provided.
Due to the Likely High Subscription, it is anticipated that not more than 25% of the Forgiven Amount may be used for Non-Payroll Costs.
The Loan Eligibility Amount will be calculated, using the Financial Documents, submitted during the Loan Eligibility Determination Process. You will need to affirm that the Financial and Payroll Documents submitted are True, Accurate and Correct.
We are aware that these Applications require submitting your Financial Statements and Payroll Documentation to speed up your Loan Determination Process. We are excited to announce that, we are available to help you with furnishing these Documents and making them available to make this Possible.
Feel Free to Reach out to us and let us know, how we can assist you.