What Small Businesses Should Know About the Paycheck Protection Program and Other SBA Loans
The SBA offers Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDLs) to small businesses impacted by the Coronavirus pandemic. Eligible small businesses may apply for the PPP in addition to other SBA loans, such as section 7(a) loans or EIDLs, but there are important considerations you should know.
If you receive both a PPP loan and EIDL, the funds must be used for different purposes. For example, the funds would need to cover payroll costs for a different period or be used for other eligible expenses. If an EIDL loan financed between January 31 and April 3 is used for payroll costs, it will be refinanced into your PPP loan if you apply for one.
Businesses that receive an EIDL advance grant (up to $10,000) will be subtracted from the PPP loan forgiveness amount. The amount also has to be declared when the borrower applies for the PPP loan and when PPP loan forgiveness.
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