Forgivable PPP and EIDL Loans and State Based Grants

The CARES Act provides loans for small businesses. This includes a partly or fully forgivable Paycheck Protection Program loan and EIDL loan. States also are providing relief, so we will cover that here too.

A business that qualifies for both loans and state relief, and spends the money on eligible expenses, could end up with more than enough money to cover expenses for months and not owe a cent back.

These loans are part of the stimulus and are meant to help businesses stay afloat and keep employees employed. Businesses are meant to take these loans rather than shut their doors.

With all of that in mind, each loan has different qualifications and works a bit differently. We’ll cover the basics of what you need to know, see the links for more info.

Quick Facts on the Stimulus Loans

Below are descriptions of the loans, first here are some quick facts:

  • Loans are provided as stimulus by the CARES Act through the SBA.
  • Businesses with between 1 and 500 employees may qualify for some or all of the programs noted below. This includes small business owners AND self employed taxpayers.
  • Your business has to have filed taxes to qualify.
  • You generally need to have been in business and paying employees up until February to qualify.
  • Forgivable means the loans are not meant to be repaid as long as they are spent on eligible expenses. These loans are meant to be forgiven, you just have to make sure to follow rules like not firing employees and not reducing employee hours.
  • You can be eligible for these AND other assistance under the stimulus like the $1,200 check.
  • You must apply for each program by filing out the form and submitting it to the proper entity (your bank, an SBA lender, SBA online, etc).

Paycheck Protection Program

There is a new program from the SBA that was passed as part of the CARES Act called the Paycheck Protection Program. The program provides an SBA loan to pay employees or yourself if you are self-employed, rent and utilities if you are approved, subject to certain limitations. The loan can be partially or fully forgiven if certain requirements are met.

You are required to apply through your banker (or an approved SBA lender). The application window for self-employed taxpayers opens on Friday, April 10.

EIDL Loan Advance

The SBA is offering a EIDL loan advance of up to $10,000 which does not have to be repaid. Funds will be made available following a successful application, made directly through the SBA online.

State-based Relief

Many states have their own relief programs for small businesses. For example, in Washington State, the Working Washington Small Business Emergency Grant program is set up to provide up to $10,000 in funding for qualified businesses who have up to 10 full time employees.

Blog posts about the Stimulus