Changes to two small business loan programs that could be good news for you

Update to this article: As of July 4, the deadline for applying for a Paycheck Protection Program loan has been extended through August 8.

Two loan programs helping out small businesses have made some recent changes. As an advocate for your business, we want to keep you in the loop on how they could impact you.

1) Economic Injury Disaster Loan (EIDL) Program

Recap: The Economic Injury Disaster Loan Program provides low-interest working capital loans to help offset the impact of decreased revenue due to COVID-19. (A working capital loan is a loan that finances a company’s everyday operations to meet short-term needs.) These loans cover debts, payroll and other bills that aren’t covered by the Paycheck Protection Program.

Updates:

  • Good news! As of June 15, the Small Business Administration has reopened this program.

  • Small businesses are now able to apply for a loan advance of up to $10,000.

  • Businesses don’t have to be approved for a loan to receive the advance. This means just by applying, you will receive $10,000 – no strings attached.

  • The advance doesn’t have to be repaid, but it will be deducted from your total loan eligibility.

  • Loans of up to $150,000 are available (reduced from the previous cap of $2 million).

  • U.S. agricultural businesses with fewer than 500 employees are now eligible to receive loans through the EIDL and EIDL Advance Programs.

  • This includes businesses that produce food and fiber and business in the ranching, livestock raising, aquaculture and other farming and agricultural industries.

  • If you previously submitted an application, your submission will be processed on a first-come, first-serve basis, which means there’s no need to re-apply.

Details about the Economic Injury Disaster Loan:

  • Interest rate is 3.75% for small businesses and 2.75% for non-profits

  • Loans can be used to pay fixed debts, payroll, accounts payable and other bills

  • Long-term repayment options available – in some cases, up to 30 years

Interested in applying? Complete your worksheet here.

2) Paycheck Protection Program (PPP)

Recap: The Paycheck Protection Program is designed to help small business owners hold onto their employees and continue business as usual by providing government-backed loans to cover costs like payroll, rent, utilities and other operating expenses.

Updates:

  • It just got easier for you to apply for loan forgiveness, as the Small Business Administration has revised the application.

  • A new loan application form (called the “EZ Version”) has been introduced to make the process easier for certain borrowers. New measures include:

  • Options for borrowers to calculate payroll costs based on their company’s regular payroll cycles
  • Expanded coverage of non-payroll expenses paid or incurred during the 24-week period after receiving your loan
  • Step-by-step instructions on performing the calculations to make sure you’re eligible for loan forgiveness (required by the CARES Act)
  • New exemptions to restrictions that might have reduced your loan forgiveness

  • Important: the program is open to new applications through August 8.

Details about the PPP loan:

  • 1% interest rate

  • Covers expenses for 24 weeks

  • Provides 2.5x your monthly payroll costs (up to $10 million)

  • Payments may be deferred for six months

Interested in applying for a PPP loan?

Fill out an application here. Then submit it to a Small Business Association participating lender. Click here to find eligible lenders in your area.

As an advocate who believes in your business, we’re sharing resources and guidance that could help you out right now. Because we know you want to do everything you can to save money, we’re also here for you with free quotes that could lower your rates on business insurance (or even improve your coverage). Ask a licensed Mylo agent to review your current policy and try to beat it.

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