The Coronavirus Aid, Relief, and Economic Security Act, or “CARES Act,” provides aid for small businesses, large corporations, hospitals, and public health agencies, and state and local governments.  

 

Particularly noteworthy are two small business loan programs expanded by the CARES Act:
 

  • The $349 billion small business loan “Paycheck Protection Program” (PPP), which expands the scope of businesses eligible for Section 7(a) SBA loans, alters the maximum loan amounts and permitted uses of loan proceeds, and affords repayment relief and loan forgiveness to borrowers. 

  • The “Economic Injury Disaster” (EID) loan program.  EID loans are long-term loans with varying repayment terms of up to 30 years, with loan amounts determined by actual economic injury, up to $2 million, with a 3.75% interest rate. An online application for the EID loan program can be found here.

Here is a helpful table comparing key terms of PPP loans versus EID loans.

Paycheck Protection Program (PPP)

Economic Injury Disaster (EID)

Where To Apply 

Apply With your Bank

Loan Amount 

2.5x Employer's average monthly payroll cost during the prior 12 months - capped at $10,000,000.00

Determined by actual economic injury up to $2,000,000.00

Interest Rate 

0.5%

3.75%

Use of Proceeds

Payroll, Rent, Utilities and Mortgage Interest

Fixed Debt, Payroll Account Payable and other bills that cannot be paid due to

Covid -19

Loan Forgiveness

Up to the amount of payroll, rent, utilities, and mortgage payments paid during the first 8 weeks from the loan's Origination. The amount of forgiveness is not included in taxable income

Not Eligible 

Advance 

No Advance

The applicant can request an emergency advance of up to $10,000,00

Collateral

No Collateral

UCC Lien Against Available Assets

Term 

2 Years 

Up to 30 Years 

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