Comparing Small Business Disaster Loans

Comparing Small Business Disaster Loans
Jillian Bateman — April 2, 2020

Small business applicants can apply for Economic Injury Disaster Loans and the Paycheck Protection Program if there are different uses of proceeds for each loan. Funds from the loans cannot be comingled.

  • EIDL funds come directly from the U.S. Treasury. Applicants do not apply through a bank.
  • Your application to participate in the SBA Paycheck Protection Program is subject to SBA approval.
Economic Injury Disaster Loan (EIDL)Paycheck Protection Program (PPP)
Companies with no more than 500 employees, including cooperatives, ESOPs, nonprofit organizations, sole proprietors, the self-employed, and independent contractors• Companies no more than 500 employees, or their applicable employee size standard for their North American Industrial Classification System (NAICS)

• 501 (c)(3) non-profits with fewer than 500 employees.

• Sole proprietors, the self-employed, and independent contractors

• Must have been in operation as of 2/15/20
Use of
Pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact.Payroll, group health benefits, salary and employee commissions, interest on mortgages, rent, utilities, and interest on debt incurred before February 15, 2020.
Loan Amount
Up to $2,000,000The lesser of:
• $10,000,000; OR

• For companies that have been in business for a year: The average
monthly payroll for the preceding 12 months multiplied by 2.5; OR

• For seasonal businesses: Avg. total monthly payroll costs for a 12‑week period from 3/1/19–6/30/19 multiplied by 2.5; OR

• For companies that were not in business before the period February 15, 2019–June 30, 2019: The average monthly payroll for the period January 1, 2020 through February 29, 2020 multiplied by AND

The outstanding amount of any emergency loan made from 1/31/20
until 3/27/20.
Limitations on Payroll NonePayroll costs excludes compensation paid to individuals including the
self-employed, above $100,000
SBA Guaranty
Rate3.75% for profit 2.75% non-profitNo more than 4%
TermUp to 30 years. Terms are case-by-case.10-year term after application for forgiveness
PaymentDeferred for one yearDeferment permitted for up to one year
Loans over $200,000 will require a personal guaranteeNone
CollateralCollateral required on EIDL over $25,000; UCC on all business assets and possibly real estateNone
ForgivenessAn advance of $10,000 will be provided as a grant within three days of application and is not required to be repaid if loan deniedEqual to the amount spent by the borrower during an 8-week period after the origination date of the loan on payroll costs, interest payment on any mortgage, rent, utilities, or other interest. Forgiveness amount will be reduced by multiplying the loan amount by:

Current FTEs divided by FTEs from 2/15/19 to 6/30/19 OR FTEs from 1/1/20 to 2/29/20

Additionally, forgiveness amount is reduced by pay reductions in
excess of 25%.
WhereUS Treasury disasterloan.sba.govContact your financial institution.


Comparison information supplied by ESA partner, US Risk