The major differences between EIDL vs PPP

There are two major COVID-19 related loans currently available for small businesses: Economic Injury Disaster Loan (EIDL) and Paycheck Payroll Program (PPP). The goals for these loans are to provide cash flow to sustain the operations of small businesses during the COVID-19 crisis, which is so much more important than ever given the current economic environment.

However, there are many confusions surrounding the two loan programs and their features. We’ve prepared a simplified comparison between the two loans to help guide you in your decision on which to apply for.

The major differences you should know between EIDL vs PPP

EIDL	PPP
Who Is Eligible?
Small business with less than 500 employees Non profit organizations Sole proprietors with or without employees Independent contractors	Small business with less than 500 employees Non profit organizations Sole proprietors with or without employees Independent contractors Need to be in business before Feb 15 2020
Maximum Loan Amounts
$2 million	$10 million
Cash Advance (not required to be paid back)
Yes $1000 per employee up to $10 employees	No
Loan Forgiveness
No	Yes, up to 8 weeks of qualified expenses from the inception of the loan. At least 75% of the loans need to be used for payroll  Loans amount that are used for the following (no more than 25% of the total loans) Utilities Mortgage Interest Rent
Annual Interest Rate
3.75% for business; 2.75% for non-profit	1% for the unforgiven loan portion
Term of the Loan
Up to 30 years, no prepayment penalties	2 years, payment can be deferred for 6 months.
Collateral and Personal Guaranteed?
Yes, lien against business asset Yes, personal guarantee for loan more than $200,000	No
Where to Get the Loan?
SBA Loan application: link here	Major banks and credit unions that are SBA lenders Loan application: link here

We hope this provides you with more insights into the two programs: EIDL and PPP. We anticipate further updates from the government, and we will update this table continuously as we hear them.

Americans throughout the country are scrambling to gather funding and capital for their business. It’s a scary time, and we empathize with every business owner because we can feel the impacts here at A4E.

Please don’t hesitate to contact us if you have any questions or are looking for accounting and/or tax support. Stay positive, stay safe.