Press Release (ePRNews.com) - BOCA RATON, Fla. - Apr 05, 2021 - President Biden recently signed the Payment Protection Plan (PPP) Extension Act, which extends the application deadline for this program to May 31, 2021. Determining whether or not the PPP loan or Economic Injury Disaster Loans (EIDL) is right for a small business can be difficult. Read on to discover what is the purpose of each loan and how companies can benefit from them.
PPP vs. EIDL
EIDLs are meant to help small businesses cover their operational expenses for six months, while the primary purpose of PPP loans is to cover eight weeks of payroll expenses. Both options are available for small businesses. (Use the Small Business Administration’s size standards tool to determine if a company is considered a small business.)
SBA Paycheck Protection Program Highlights
Maximum loan amount: $10 million
Forgivable: the loan is forgivable if 60% is spent on the business’ payroll expenses
Collateral: there are no collateral or personal guarantees required
Credit check: there is no credit check required
Payment deferral: if the loan is not forgiven, the first payment can be deferred for up to 10 months after the last day of the covered period
Apply through an approved lender
Terms: if the loan is not forgiven, there will be 1% interest
Loan uses: the loan may be used for payroll expenses, rent, mortgage interest, and utilities
SBA Economic Injury Disaster Loans Highlights
Maximum loan amount: $500,000
Forgivable: the loan is not forgivable
Collateral: loans that exceed $25,000 must be secured by collateral to the extent possible, and if the business has no collateral to pledge, assets of the business owners may need to be pledged as collateral
Credit check: decent credit needed to qualify for this loan
Payment deferral: the first payment can be deferred for up to 12 months
Apply through the SBA website
Terms: pay 3.75% interest for up to 30 years or 2.75% if the business is a non-profit
Loan uses: the loan can be used for fixed debt, payroll, accounts payable, and bills that could have been paid had the disaster not occurred
For help navigating these options or alternative funding opportunities, please contact the Family Business Fund and discover how to get started on the road to continued success.
About Family Business Fund
The Family Business Fund was founded in 2018 to help ensure that small businesses have access to the resources needed to thrive. Founded by small business owners for small business owners, we provide alternative funding to small and mid-sized businesses in need. For more information, contact Douglas Muir at email@example.com or call (888) 884-6442 ext. 3.
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