Comparison Overview

The diagram referenced below outlines federal sponsored grants and loan programs through the SBA to help you understand your federal COVID-19 assistance options.

Before exploring the diagram, be sure to look into the following areas of interest highlighted below - by Bench - regarding a set of unique circumstances that may affect which resource(s) are best suited for your small business.

Note: As of August 8, 2020, the PPP is closed and no longer accepting applications.

Combining Loans

Though all four loans are processed through the SBA you may apply to all of them at once as long as:

  1. your business is eligible
  2. funds from each loan are not for overlapping purposes

For example, you can’t use both EIDL and PPP towards payroll. As long as you do not use the EIDL for payroll costs, your PPP eligibility will not be affected. If the EIDL is used for payroll costs, your PPP amount will have to be used to refinance the EIDL.

Additionally, Your EIDL advance grant cannot be combined with the PPP.

The EIDL can come with an advanced grant of up to $10,000. As a grant, it won’t have to be paid back. However, it will be subtracted from the PPP loan forgiveness amount and has to be declared when you apply for the PPP.

Where the EIDL Falls Short

You're EIDL loan cannot be used for the following expenses:

  • Dividends and Bonus
  • Disbursements to owners
  • Expansion of facilities or acquisition of fixed assets
  • Refinancing long term debt
  • Relocation
  • Repair or replacement of physical damages
  • Repayment of stockholder/ principal loans
Where the PPP Falls Short

Your PPP loan is calculated based on wages that employment and self-employment taxes have been paid on. This generally comes in the form of:

Entity typeTaxed wage typeWhere to find it
Sole props / single -member LLCsNet profitForm 1040 Schedule C
Partnership LLCsNet profitForm 1065 and associated K-1s
CorporationsPayroll expensesPayroll reports

As a result, businesses in the following category would not see much benefit from PPP:

  • businesses with little or no payroll expense
  • if you pay yourself using owner draws or member distributions
  • If you are a sole prop or partnership and did not have a net profit reported in 2019 (i.e. you had a net loss)

Finally, you cannot double-dip with unemployment benefits while using PPP funds. If your business would benefit from both resources, it is recommended to use the PPP for 8 weeks and then apply for unemployment once that period is over if no new aid has been announced.

Bookkeeping

The EIDL will require you to provide information on your business’ gross revenue and cost of goods sold over the last 12 months. If you don’t have this information handy, you’ll likely need retroactive bookkeeping done so you can calculate this number properly.

For the PPP, you don’t need to have bookkeeping done to apply - as your business runs payroll through a payroll service and you can submit your payroll records. If you’re self-employed, you’ll need to submit your net profit, which you will need bookkeeping to calculate properly. Once you’ve been approved for the PPP, bookkeeping becomes even more important: you’ll need to track your expenses in order to prove you spent the funds on the right things—this will be a key component of getting your PPP loan forgiven.

Further information on record keeping for PPP loan purposes can be found here in the "PPP Made Easy" section.

Additionally, don’t have a bookkeeping solution in place? Bench can help. They will do your bookkeeping (even retroactively) and provide you with all the financial statements you need.

Comparison Criteria

CARES Paycheck Protection Loan (PPP)

SBA Economic Injury Disaster Loan (EIDL)

SBA Express Bridge Loans (EBL)

SBA Debt Relief

Main Street Lending Program

Status

  • CLOSED on August 8, 2020, and is no longer accepting applications.
  • OPEN, with the exception of EIDL Advance
  • OPEN
  • OPEN (available for loans fully disbursed prior to Sept. 27, 2020)
  • OPEN (Dec 31, 2020)

General

  • Loan on favorable terms for 8 weeks of payroll and operating expenses (Not past 12/31/20)
  • 100% federal guarantee
  • Automatic 6 month pay deferral (extendable to 1 year)
  • Grant of up to $150,000 possible
  • Disaster relief SBA loan
  • If you have an existing relationship with an SBA Express Lender, you can access up to $25,000 quickly.
  • Loan term is 7 years max
  • Note that a bill has passed in the House to extend SBA Debt Relief but hasn't passed the Senate
  • Provides relief to small businesses with SBA 7(a). 504 and microloans
  • Borrowers with eligible loans do not need to apply
  • Established three facilities that lend to small and medium-sized for-profit businesses. Interested borrowers will work with an eligible lender, who lends via a special purpose vehicle. The Fed purchases a 95% interest in the loan, and the lender retains 5%

Purpose

  • No more that 40% of loan proceeds can be used towards non-payroll costs (rent, mortgage interest, utilities, and other operating expenses)
  • Fixed debt, accounts payable, payroll, outstanding bills caused by disaster, and other working capital / liquidity related expenses
  • In conjunction with EIDL for working capital and liquidity on the basis of business survival and/or re-opening
  • SBA will cover loan payments including principal and interest for up to 6 months
  • To help maintain operations and payroll- can be used for operational and other expenses necessary for business survival

Eligibility

  • employers with less than 500 employees*
  • Change to one bullet that reads: Small businesses (including agricultural businesses) with less than 500 employees
  • Employers with 500 or fewer employees
  • Underwriting guidelines apply
  • Employers with 500 of fewer employees with current 7(a), 504 or microloan; or received one within six months of CARES Act
  • Eligible businesses must: 1) have been established prior to March 13, 2020, 2) have 15,000 employees or fewer OR have 2019 annual revenues of $5bn or less, 3) not have received specific support pursuant to the Coronavirus Economic Stabilization Act of 2020 -- this is specific to large airlines and other major industries. Businesses who applied to PPP are eligible.

Available Loan Value

  • Up to $10mil
  • Determined by up to 250% of qualifying average monthly payroll applying $100,000 per employee wage cap
  • Up to $2 million (temporarily capped at $150,000)
  • Determined by SBA based on working capital needs such as fixed debt and payroll
  • Up to $25,000
  • 6 months of principle and interest on:
    • SBA 7(a) loans up to $5 million
    • 504 loans up to $5.5 million
    • Micro-loans up to $50,000
  • Minimum loan size of $100,000, maximum loan size of $35M+

Loan Forgiveness

  • A new two-page, simpler loan forgiveness application for PPP loans of $50,000 or less has been released (Form 3508S). Loan forgiveness amount is reduced by the dollar amount of the EIDL Advance grant, regardless of if the money was used for different expenses
  • No
  • Not eligible for forgiveness
  • N/A
  • No

Interest Rate

(if not eligible for forgiveness)

  • 1%
  • 2.75%-3.75%
  • Prime + 6.5%
  • N/A
  • LIBOR + 3%

Restrictions

  • Driven by necessity
  • Loans over $2mil will likely trigger an audit
  • Forgiven loans cannot be used as a tax credit
  • Cannot use $10,000 CARES employee retention credit
  • Must stop Social security deferrals after you receive notice your PPP loan is forgiven
  • Cannot use a PPP loan and EIDL loan for the same expenses
  • Cannot be used to refinance long-term debt
  • N/A
  • N/A
  • Must commit to making commercially reasonable efforts to maintain payroll and retain workers and follow compensation, stock repurchase, and dividend restrictions that apply to direct loan programs under the CARES Act.

*You are a small business and have 500 or fewer employees OR no greater than the number of employees set by the SBA as the size standard for certain industries

SBA Coronavirus Recovery Information in Languages other than English

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