What Is The Difference Between PPP And Eidl?

What happens if you get PPP and Eidl?

If you get an EIDL loan and later apply for a PPP loan, you can refinance the EIDL loan with the PPP loan.

With a bigger PPP loan you can use part of the proceeds for approved used and part to pay off your outstanding EIDL.

If the EIDL was not used for payroll costs, it doesn’t have any impact on your PPP loan..

Should I apply for PPP?

Even though funds can be depleted, it’s still a good idea to apply for a PPP loan. Applying as soon as possible means that when the program receives additional funding, your application will already be in the queue. As the PPP gets more funding, you want your application to be at the front of the line.

What can I use my PPP loan for?

Generally, PPP funds can be used for four purposes: payroll, mortgage interest, rent/lease, and utilities. Payroll should be the major use of the loan.

Who is not eligible for PPP?

Passive businesses owned by developers and landlords that do not actively use or occupy the assets acquired or improved with the loan proceeds (except as Eligible Passive Companies under 13 CFR § 120.111) are not eligible.

Which is better PPP or EIDL?

EIDL has a higher interest rate than PPP (3.75% vs. … However, you can use the EIDL for payroll once you’ve exhausted the PPP after those two months have passed. If your business receives both loans or refinances an EIDL into a PPP loan, the EIDL grant amount will be subtracted from the amount forgiven in the PPP loan.

What is the difference between the PPP and SBA loan?

The loans are made available through the Small Business Administration (SBA) under the CARES Act. … EIDLs offer advances up to $10,000 that do not need to be repaid, while PPP loans provide small business loans equal to 2.5 times their average monthly payroll, up to $10 million.

Does the Eidl reduce the PPP?

The amount of the EIDL loan to be refinanced does not include the amount of any EIDL “advance” (also referred to as an EIDL “grant”) received by the business, because the EIDL advance does not need to be repaid, but will reduce the amount of any PPP loan forgiveness.

Can you accept Eidl and PPP?

Yes, you can apply for both. But you can’t use the funds from both loan programs for the same purpose. For the most updated and complete information, read the FAQs on the EIDL and FAQs on the PPP.

What can you use the SBA EIDL loan for?

Repair or replacement of physical damages; Refinancing long term debt; Paying down (including regular installment payments) or paying off loans provided, or owned by another Federal agency (including SBA) or a Small Business Investment Company licensed under the Small Business Investment Act.

What counts as utilities PPP loan?

UTILITIES. Utilities are the last qualified expense under the PPP program. These are described by the SBA as phone, internet, gas, water, electricity, etc.

How do you get approved for PPP?

9 Things You Can Do to Ensure Your PPP Application is ApprovedDetermine the amount you are eligible for. … Calculate the amount that can be forgiven. … Determine eligible expenses you’ll cover with the PPP Loan. … Have your paperwork ready. … Work with a local bank if possible. … Talk to multiple banks. … Don’t start applications with multiple banks.More items…•

What is needed for PPP?

Documentation Needed for PPP Loan Forgiveness Documentation verifying the number of employees on payroll and pay rates—including IRS payroll tax filings and state income, payroll, and unemployment insurance filings. Documentation verifying payments on covered mortgage obligations, lease obligations, and utilities.