As of June 15, the U.S. Small Business Administration has reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program to all eligible applicants experiencing economic impacts due to COVID-19. If your business has not yet applied for either the Economic Injury Disaster Loan Program (EIDL) or the Paycheck Protection Program (PPP), these programs are currently open to all eligible small businesses. These programs are the primary assistance measures the federal government has taken to help small businesses through the COVID-19 pandemic.
- 3.75% interest for businesses
- 1 year payment deferral
- 15 or 30 year term
- Up to $10,000 may be forgiven if used on eligible expenses
- Also open to agricultural businesses
The EIDL program is a loan that offers longer term financing with up to $10,000 in forgiveness. This is a loan directly from the Small Business Administration. Recent federal legislation provided more funding to reopen the program.
Paycheck Protection Program Flexibility Act Signed
The Paycheck Protection Program (PPP) Flexibility Act was recently signed into law. This legislation offers flexibility to borrowers, some of the updated changes include:
- The amount of the loan that must be used for payroll costs was reduced to 60-percent.
- The deadline to rehire workers has been moved to December 31, 2020.
- The period for loan forgiveness was extended from 8 to 24 weeks.
- Repayment terms were extended from 2 years to 5 years.
- PPP loans approved by the SBA on or after June 5, 2020 increase to five year maturity.
- Extended the borrower’s deferral period to the date the SBA sends the loan forgiveness amount to the lender. If the borrower does not apply for forgiveness, the deferral period is extended 10 months after the end of the loan forgiveness covered period.
These changes may impact how you calculate your PPP loan forgiveness. Remain in contact with your lender and get the latest information on the SBA’s Payment Protection Program website.