The Latest on Business Relief Loan Programs: What You Need to KnowIf you’re a business owner, you’ve been doing your best to keep up with the latest health guidelines, re-opening procedures, and legislation that impacts your business. Recently, there have been changes to two of the business loan assistance programs created as a result of the COVID-19 pandemic. Here’s what you need to know:
Economic Injury Disaster Loan (EIDL)
Earlier this week, the SBA re-opened the EIDL application process for eligible (500 or fewer employees) businesses, non-profits, and independent contractors. The maximum loan amount is $2 million, but if your business has already applied in the past you do not need to apply again. Nearly five million EIDL loans have been approved to date, totaling more than $100 billion.
To apply, visit the Small Business Administration website.
Paycheck Protection Program (PPP)
The PPP loans were so popular and utilized, the program ran out of funding so Congress replenished a second round of funding. As of last week, more than $130 billion still remains available for small businesses. But don’t wait too long; the deadline to get approved is June 30.
Here are some recent changes made to the PPP so that it could be more easily utilized:
- For loans made after June 5, the maturity date has been extended from two years to five
- The covered period for loan forgiveness has been extended from eight weeks to 24
- The percentage of the loan required to be allocated to payroll expenses in order to earn forgiveness has been decreased from 75 percent to 60 percent (Note: you may still be able to have a PPP loan partially forgiven without meeting this 60 percent threshold)
- The date to replace full-time employment and salaries has been extended from June 30 to December 31, 2020
You can apply for a PPP loan as well as apply for loan forgiveness on the SBA’s website.