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Frequently asked questions re: SBA COVID-19 Relief loans

Economic Injury Disaster Loans (EIDL)

Paycheck Protection Program Loans (PPP)

Q. What makes this loan different from other business loans and why should I apply for one?

A. The loan repayment terms are fairly generous and it's not difficult to have at least some part of the loan forgiven.

Q. What is the purpose of this loan program?

A. Congress designed the loans to help organizations facing economic hardships created by the coronavirus pandemic and assist them in continuing to pay employee salaries.

Q. Who can apply?

A. Entities experiencing or who have experienced economic hardship due to the Coronavirus (COVID-19) Pandemic and that were in operation on February 15, 2020:

  • Sole proprietors, independent contractors, and self-employed persons
  • Small businesses no larger than a certain size according to their annual receipts or number of employees, and by industry classification
  • Any business with a NAICS Code that begins with 72 including | Then click here to see less
  • Any business, tax-exempt non-profit organizations, veteran organization, or tribal business concerns with the greater of: Continued | Then click here to see less

Q. How much can I borrow?

A. For businesses with employees: Formula | Then click here to see less

   For Sole proprietors, independent contractors, and self-employed persons: Formula | Then click here to see less

Q. What is the interest rate and when does the loan have to be repaid?

A. 1% interest rate. The minimum term for PPP loans is five years for loans made after June 5, 2020. Loan repayment terms | Then click here to see less

Q. How can I have the loan forgiven?

A. By doing the following:

  • Spend the funds on eligible expenses, i.e.

    (a) Spend at least 60% of borrowed PPP funds on payroll costs (including tips, bonuses, commissions, employee benefits)

    (b) Spend the remaining 40% on the following expenses:

    Continued | Then click here to see less
  • Record the PPP proceeds received as a loan on your books.
  • Track eligible expenses per above over the next 24 weeks More on "Covered Period" | Then click here to see less
  • Apply for forgiveness with your lender after 24 weeks More about Forgiveness | Then click here to see less
  • Reclassify any amounts forgiven as non-taxable income.
  • For self-employed individuals, sole proprietors and independent contractors, you don't need to have employees to qualify for PPP loan forgiveness. Forgiveness formula for SE individuals | Then click here to see less

Q. Is the forgiven amount of the loan taxable?

A. The forgiven amount is excluded from taxation on a Federal tax return. However, Continued | Then click here to see less

Q. Can I apply for more than one PPP loan?

A. You can, but not necessarily legally. Continued | Then click here to see less

Q. Can I receive both a PPP loan and a EIDL (Economic Injury Disaster Loan)?

A. Yes, but you can't use your PPP loan for the same purpose as your EIDL. For example | Then click here to see less

Q. How many lenders should I, or we, apply to for a PPP loan to assure that we're approved for one?

A. At least three. I've had success applying to these four lenders: Kabbage, US Bank, Lendio, and Newtek, although I don't recommend applying to Newtek.

Q. What experience does your firm have in applying for PPP loans?

A. I, Gary Krupa, CPA, have successfully applied for and received three PPP loans since late April, 2020, on behalf of my clients and me, for a total of nearly $31,000 in loans received.

Q. What other PPP loan services do you offer?

A. Review and signing of loan documents, accounting and bookkeeping advice re: compliance with loan forgiveness requirements, completion of the loan forgiveness application.

For more information about the PPP loan program, visit:

"SBA Paycheck Protection Program"

Paycheck Protection Program - How To Calculate Maximum Loan Amounts for Corporations, page 4.

"Need A Loan Now That The Paycheck Protection Program Is Running Again? Try These Nonbank Lenders"

"PPP Loans: Lender List and Requirements"

The pages linked to above are current as of July 20, 2020. As new information about the PPP loan program becomes available, it'll be presented here.

Economic Injury Disaster Loans (EIDL)

Q. What is the purpose of these loans?

A. EIDL is designed to provide economic relief to businesses that are experiencing a temporary loss of revenue due to the Coronavirus (COVID-19) Pandemic.

Q. What can the loan proceeds be used for?

A. Fixed debt payments, payroll and related benefits (except compensation in excess of $100,000 and certain sick and family leave expenses), accounts payable and other expenses that cannot be paid because of the disaster’s impact, and other payments that aren't being paid by a PPP loan.

Q. What can't the proceeds be used for?

A. Refinancing of debt, payment of other SBA loans or lenders, tax penalties, civil fines, repairs of property or other physical damage, dividend or distribution payments to owners or partners.

Q. Who can apply?

A. The following entities:

  • Businesses with fewer than 500 employees including:
    • Businesses in all U.S. states and territories Internationally owned organizations located in the U.S.
    • Agricultural cooperatives
    • Tribal business concerns
    • ESOPs
  • Private nonprofit organizations
  • Sole proprietors
  • Independent contractors

Q. How much money can be borrowed?

A. Up to $2,000,000, with an unofficial maximum of $150,000 according to the NY Times, due to the high volume of application.

Q. What is the interest rate?

A. 3.75% for businesses and commercial enterprises, 2.75% for non-profit organizations

Q. What is the term of the loan?

A. Up to thirty years.

Q. Is there a deferral period for loan repayment?

A. Yes, for 12 months, although interest accrues during that period.

Q. Can the loan be prepaid?

A. Yes.

Q. Can the loan be forgiven?

A. No.

Q. Is the $1,000 per employee advance still available for these loans?

A. No. All the funds available to pay advances were used up due to the demand for these loans.

Q. Where can I apply?

A. At SBA EIDL application

For more information about the EIDL program, visit:

SBA: Economic Injury Disaster Loans

smartasset: Economic Injury Disaster Loans (EIDLs)

Comparison of EIDL and Paycheck Protection Programs

Paycheck Protection Program loans (above)