The COVID-19 pandemic has wreaked havoc on many businesses as we all know. Some have had to close their doors while others are struggling every day to keep afloat. It’s important to know what resources are available during this time to help keep your business running and your workforce employed. 

What resources are available for your business? 

PPP – Paycheck Protection Program

Between quarantine and lack of necessary supplies, businesses have had less revenue coming in which has resulted in a lot of employees being let go. This is where the Paycheck Protection Program comes in handy. The PPP was created to help businesses continue to pay their employees during the pandemic by providing funding for payroll costs and benefits. The PPP can also be used to pay mortgage interest and utilities among other bills. One of the benefits of this loan is that not only does it keep workers on payroll, but it also offers loan forgiveness to the business if they use their funds properly. 

The PPP has a 1% interest rate and if the borrower does not apply for loan forgiveness, payments are deferred for up to 10 months. The SBA doesn’t charge any fees on this loan and there isn’t any collateral or personal guarantees required. 

As a business, you may qualify for the Paycheck Protection Program if you are self-employed, an independent contractor, or sole proprietor or if you are a business such as a 501(c)a(3) non-profit, 501(c)(19) veterans organization or tribal business, if you have up to 500 employees or if your business meets the SBA industry size standard if you have more than 500 employees. You can also qualify if you are a business with an NAICS code that begins with 72 if you have more than one location and less than 500 employees at each location.

The SBA released a 2nd draw PPP which allows for businesses who have already received the PPP in the first round to apply again with the same general loan terms. Businesses may be eligible if they have fewer than 10 employees or loan amounts less than $250,000. The maximum loan amount of most borrowers is usually 2.5x the average monthly 2019 or 2020 payroll costs up to $2 million, unless you have a business with NAICS code 72 and then that loan amount is increased to 3.5x average monthly payroll costs. 

You may qualify for the 2nd round of PPP if your business previously received the PPP and has used the full amount, if you have less than 300 employees and if you can show a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. 


EIDL stands for Economic Industry Disaster Loan and it’s a long-term direct loan that comes from the SBA. This loan was put into place for businesses to keep afloat and meet financial obligations that would have been met had the disaster (i.e. pandemic) not occurred. This loan has a 3.75% interest rate for businesses and 2.75% interest rate for nonprofits and offers up to 6 months of working capital, up to $150,000.

Unlike the PPP, this loan requires collateral for loan amounts higher than $25,000 and personal guarantees for loans higher than $200,000.Payments are deferred for 1 year but interest is still accrued during that time. 

EIDL Grant

The EIDL Grant provides capital to businesses and nonprofits in low-income communities if they have had a 30% or greater reduction in revenue and have less than 300 employees. The EIDL grant provides $10,000 to certain small businesses with an interest rate of 3.75%, though the grant does not have to be repaid. Businesses can only apply for this grant if they receive a direct invitation from the SBA. You may be eligible if you have a business with less than 500 employees, or meet the SBA industry size standard, or if you are an agricultural enterprise with fewer than 500 employees. In addition, most private nonprofits and faith-based organizations as well as sole proprietorships and independent contractors are also eligible for the EIDL grant.

If you’ve already received help from the PPP, you can still apply for the EIDL. You just can’t use the assistance for the same purpose.

It’s a difficult time for businesses right now and as you can see, there are great resources out there to help take some of that burden off your plate.  

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