$10,000 EIDL GRANT

Are You referring to EIDL or PPP? I’m wondering what the best route is to apply for PPP

 

EIDL...at 3.75%

PPP was a short 48 hours deal via PayPal :
Applied on Wendsday, money hit the bank on Friday.

 

Maybe PayPal is still good with PPP.
I did it 3 weeks ago.

 

When I did the EIDL, it was very simple, much like the initial $1000 Advance. I was offered 77k, but only took 25k. No income questions, nothing. Just approved, and fill in amount. 3 days later, much to my surprise, it was in the bank.

 

I found the list of documents you posted on May 16th. for the ppp. That’s good, so I’ll know what to expect. But the EIDL didn’t ask Me for anything, just answered questions, they only I supposedly would know. I still can’t believe it.

 

When answering their identity questions, there is a number of private questions to answer. I think, I could have answered one that did not match exactly what they had in the system, not sure what but when finished that questionnaire, I read that I did not answer all of them correctly but I should not worry and proceed to the next step which was providing them with the disbursement information. Maybe it has something to do with the delay.

Before signing closing documents, when that step becomes available, I'll definitely call them and ask questions about applying the loan. I don't expect any thorough answers but rather something similar to IRS providing answers: ambiguities and reciting of what is already stated in the closing documents/contract.

 

I read up on allowable expenses and non allowable. For PPP and EIDL last night. The PPP has forgivable allowable, and not forgivable, repaid at 1% in 5 yrs. And Unallowed rules. The One thing that caught my attention was the EIDL forgivable advance, if spent on Unallowed items, must be repaid at 1.5 x the amount. I don’t think any of it’s going to be a problem. Since I’ve paid my ins twice, since getting it. But all receipts and a bank record of expenses will be needed, for easy forgiveness of PPP. The part I don’t understand about the EIDL, they way I read it, interest is only charged on the amount spent, yet they put the whole 25k, in my Bank. No pymts due for a yr. Yet all interest still accrues.How could they track my spending of it, for interest charges? I must have read it wrong. It may end up costing a small chunk, just to have it parked for a yr. even if I pay it all back.

 

It's my understanding that the EIDL is simply a small business loan with few if any restrictions. You simply take out the loan and pay it back over 30 years at 3.75% interest. You can use it for whatever including paying yourself. It's difficult to figure out the specifics on the EIDL because everything you look up online pretty much pertains to the PPP. Regarding the advance or grant offered by the SBA, all it says on the SBA web site is:

In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories were able to apply for an Economic Injury Disaster Loan advance of up to $10,000. This advance is designed to provide economic relief to businesses that are currently experiencing a temporary loss of revenue. This loan advance will not have to be repaid.

I believe that it was set up like the $1,200 checks to individuals. Just a means to pay bills while everything was shut down. Unlike the PPP loan where 60% of the load amount must go toward payroll if it is to be forgiven, this was just set up as a means to keep businesses afloat during the shutdown.

 

Found this on Forbs website.
Here are 10 things you need to know about the loan programs:

1. If you are a business with under 500 employees, you are considered a small business (with some exceptions) and can qualify for the loans. Nonprofits and veterans’ organizations also qualify. All 50 states have been declared disaster areas and, therefore, no matter where your company is based, you may apply.

2. The EIDL loans offer up to $2 million for working capital needs such as fixed debt and payroll. You apply for the EIDL loan on the SBA website www.sba.gov/disaster. The interest rate is 3.75% for businesses and 2.75% for nonprofits with a 30-year term possible. There is an automatic one-year deferment on repayment so the first payment is not due for a full year, although interest begins to accrue at time of disbursement.

3. If you apply for an EIDL loan, you can request a $10,000 grant for working capital. Don’t forget to check the box requesting the grant! The requirements for the application have also been scaled down and no additional documentation such as tax returns or personal financial statements are required when submitting the application. The SBA claims you will receive this grant within three days of the application filing, whether or not you ultimately qualify for a loan. Again, it is a grant that does not have to be repaid.

4. The PPP loans provide up to $10 million. You need to apply for this loan through an SBA-certified lender beginning on April 3. The SBA will be certifying additional banks to meet demand, but that could take several weeks. You can calculate how much you are eligible for by multiplying your 2019 average payroll costs for all employees up to $100,000 in salary per employee by 2.5. Independent contractors do not factor into this calculation as they can apply for their own PPP loans.

5. Once the loan is secured, you track all these expenses for 8 weeks. After that time, you have to return to the lender and document them. They will review and, if acceptable, forgive the portion of the loan used for the expenses (i.e., it becomes a grant you do not have to repay). If you reduce headcount during this time, they will reduce the forgiveness in proportion to the reduction (i.e., if payroll is reduced by 25% forgiveness is reduced by 25%).

6. For the portion of the loan not forgiven, the interest rate is 1% for a two-year term. Interest does accrue from the start of the loan, but there is a 6-month deferment on the first payment and no prepayment penalty.

7. If you received the EIDL $10,000 grant, that will be subtracted from the forgiveness amount. Any previous EIDL loans can be rolled into the new PPP loans.

8. The SBA is waiving the previous requirement for having additional credit options, along with the need to apply for additional credit and failing to secure it prior to applying for these loans—the “Credit Elsewhere Test.” The SBA will also be lenient if you have a poor credit score and are looking more at future lost revenue than the ability to repay.

9. The SBA is waiving the requirement to secure the loan with real estate or a personal guaranty, and review of personal financial statements.

10. Apply at sba.gov/funding-programs/disaster-assistance.

The regulations are still evolving with regard to these loans, so stay tuned for updated information. The key takeaway is that the SBA is trying to reduce the requirements as much as possible, to grant and loan as much money as possible, and to provide more lenders to administer these loans. There is a cap to this round of funding, so apply today.

RELATED ARTICLES:

• Small Business Relief: COVID-19 Resources for Startups
• Financial Help for Freelancers and Independent Contractors Affected by the Coronavirus Crisis
• What Advice Are Venture Capitalists Giving to Startups in Light of the Coronavirus?
• 5 Ways to Improve Employee Communication During the COVID-19 Crisis

I am an attorney and president of Global Vision Communications, an agency specializing in strategic communications, marketing, and advertising for trade associations, nonprofits, coalitions, and corporations. I specialize in small business policy and have run small business outreach campaigns for major organizations such as Visa, MasterCard, the U.S. Chamber of Commerce, and the U.S. Department of Commerce. I am a writer, creative think tank member, and expert on communications and business strategy. I’m a sought-after speaker at business events on marketing and communications, both inside and outside the Beltway. I am also the author of two novels, An Animal Cries and God in Hell’s Kitchen.

This article was originally published on AllBusiness.com. See all articles by Neil Hare.