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This week both the Senate and House passed a $484 billion stimulus package that provides additional funding to two of the Small Business Administration’s (SBA) disaster relief loans. The bill provides about $320 billion in funding to the Paycheck Protection Program (PPP) and an additional $60 billion to the Economic Injury Disaster Loan (EIDL) program. About $75 billion will go to support hospitals, and the remaining $25 billion will be used will for coronavirus testing.

Payroll Protection Program: What You Need to Know

PPP offers low-interest loans up to 2.5 times average 2019 monthly payroll. These funds can be used to cover all payroll expenses to help retain employees and cover some operating expenses such as utilities. The full amount of these loans may be forgiven if certain requirements are met. If not forgiven, the loan amount rolls over to a 1% two-year term loan. Payments are deferred for the first six months. There is no personal loan guarantee or collateral required to receive a PPP loan.

Economic Injury Disaster Loan Program: What You Need to Know

EIDL offers up to $10,000 emergency grants and low-interest loans up to $2 million to cover operating expenses during the COVID-19 crisis. EIDLs were not available to dairy farmers in the initial round of funding provided by the $2.2 trillion CARES Act. The agriculture restriction was lifted for the second round of funding. Small businesses can apply for and receive both loans simultaneously, but they cannot be used to cover the same expenses.

How to Apply for These Programs

To apply for a PPP loan, contact your lender. If your lender is not offering PPP loans, contact a different lender or there are some online options. Both PayPal and Intuit are authorized to provide PPP loans. EIDLs can only be applied for online through the SBA’s Disaster Assistance webpage.

Funding for PPP and EIDL is expected to be exhausted within 36 to 48 hours after applications start being accepted. Perhaps this will be as early as next Monday, April 27. Time is extremely critical. However, applications can be completed and made ready to submit as soon as SBA starts accepting new applications. Contact your lender today to get an application for PPP, and be ready to submit it on Monday.