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  • Writer's pictureRoger DaSilva

SBA Loan info for EIDL and PPP

Over the last week, we have been gathering information from banks, lenders, VCs, clients and government officials. Realm Startup Advisory has been working with new and existing clients on how to navigate this convoluted and confusing process for obtaining funds from the CARES Act - specifically the Economic Injury Disaster Loan (EIDL) and Paycheck Protective Program (PPP).

Here is what we have gathered as of 4/3. Hopefully this helps and note that NO ONE has all of the answers, mainly because they are literally in the process of figuring it out as they go, so please be patient. Of course, please reach out to us at Realm to guide and assist you for any needs!

Our advice, get ALL docs that these websites list ready to go and fill out the apps, starting with the EIDL and PPP. Find those bank statements and tax filings.

Most Complete Summary of all info: SBA 24hr customer service hotline 1-800-659-2955 to answer your questions about their loan programs including Economic Injury Disaster Loan (EIDL) and Paycheck Protective Program (PPP) PPP details: List of Lenders: Rho form to start app process (this is NOT official app, just to get in line to be contacted by an SBA lender): Application submission starts 4/3 # Employees - Sole Proprietors ARE eligible (put 1 for # of emps) Take avg payroll (since inception if you have not been in business for 1 yr) Approval Process: PPP 1-4 weeks to be approved, depending on apps they get.  Funds disbursed 3-5 days after approved Loan Details and Forgiveness: You can get 250% of your Avg Monthly Payroll to use for Payroll - The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees. Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels.  Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. This loan has a maturity of 2 years and an interest rate of .5%. If you wish to begin preparing your application, you can download a sample form to see the information that will be requested from you. 

COVID-19 ECONOMIC INJURY DISASTER LOAN APPLICATION (EIDL) Notes from call w SBA hotline: EIDL pay back starts after 1 yr 2-3 weeks for approval, up to $10k available 1-2 days after approval then balance disbursed on a set schedule Loan 3.75% interest (2.75% for nonprofits) 30 yr loan period (max) Personal Guarantee: Under $200k = No personal guarantee required    Over $200k - personal guarantee required by any owner with 20% or more stake in the company ***Taking EIDL apps now if use PPP for payroll, then can't use EIDL for payroll (not sure if this is true, just what representative told me on the phone) ***EIDL estimate loss if you have not seen a loss of income yet QUESTION: How is the loan size determined? Answer: Depending on your business’s situation, the loan size will be calculated in different ways (see below). The maximum loan size is always $10 million. • If you were in business February 15, 2019 – June 30, 2019: Your max loan is equal to 250 percent of your average monthly payroll costs during that time period. If your business employs seasonal workers, you can opt to choose March 1, 2019 as your time period start date. • If you were not in business between February 15, 2019 – June 30, 2019: Your max loan is equal to 250 percent of your average monthly payroll costs between January 1, 2020 and February 29, 2020. • If you took out an Economic Injury Disaster Loan (EIDL) between February 15, 2020 and June 30, 2020 and you want to refinance that loan into a PPP loan, you would add the outstanding loan amount to the payroll sum.

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