New Economic Injury Disaster Loan Advance Means That You Could Get $10,000 in Your Business Bank Account Just Three Days After You Apply
As a small business owner during the COVID-19 pandemic, you are a survivor. You have used your financial and intellectual resources to find ways to reduce expenses and modify your business plan into something that is practical in the current economy. You have a three-month plan, a one-year plan, and maybe even a five-year plan. Now that businesses are operating at a reduced capacity, the hardest problems to solve are also the most urgent ones, specifically, where are you going to get money by next week? The most sustainable solutions take time to start working; meanwhile, bills are due this week and every week. The government has introduced a provision in one of its business loan programs that would enable applicants to get an advance on the loan money in just three days. For help applying, or to make the most of your business loan advance, contact a Washington DC small business lawyer.
The Difference Between PPP Loans and EIDL Loans
Many businesses in the Washington DC area have applied for Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL) to help protect them from the worst economic effects of the COVID-19 pandemic. In the early days of the pandemic, PPP loans got most of the publicity, as did the glitches associated with them. In its current form, these are the details of the PPP loan program:
- PPP loans are forgivable if you use at least 60 percent of the loan for payroll and the rest (up to 40 percent) for other overhead costs approved by the PPP guidelines
- If you use the money in a way that is not eligible for loan forgiveness, the interest rate is one percent
- If the loan must be repaid, the term for repayment is five years
These are the details of the EIDL program in its current form:
- The interest rate is 3.75 percent for businesses that borrow EIDL funds, but non-profit organizations that participate in the EIDL program can repay the loans at an interest rate of 2.75 percent
- The term for repayment is 30 years
- The first installment is due one year from the day you receive the loan money
Don’t Forget to Check the Little Box
A business loan that you can repay slowly, over as long a period of time as it takes to pay off a home mortgage, is certainly a treat, but the most attractive feature of the EIDL program is not the term of repayment. Rather, borrowers are eligible to get a $10,000 advance on the money they borrow, just by checking a box on the application form to request the advance. You can get the $10,000 advance just three days after the Small Business Association receives your application, even while the application is still being processed.
Let Us Help You Today
A small business lawyer can help you decide how to use the advance on your EIDL loan in a way that best suits your long-term business strategy. Contact the Washington DC small business law attorneys at Tobin, O’Connor & Ewing for a consultation today.