The COVID-19 pandemic has severely affected small business owners, and many of them have turned to loans from the Small Business Administration (SBA) to stay afloat. However, choosing which loan to apply for might be challenging given the variety of loans available. The primary distinctions between a PPP loan and an SBA loan will be discussed in this post along with some pertinent questions. PPP Loan versus SBA Loan
The Small Business Administration (SBA) offers both the Paycheck Protection Program (PPP) loan and the SBA loan, but they have different goals. The PPP loan is designed to assist firms in keeping their staff paid throughout the pandemic. If the money is used for salary, rent, utilities, or mortgage interest payments, it gives forgiveness. Contrarily, the SBA loan is a conventional loan that can be used for a range of business costs, including working capital, inventory, equipment, and real estate.
Yes, PayPal is one of the lenders whose loan programs for small businesses have been approved by the SBA. PayPal actually offered PPP loans among the initial lenders, and they have now increased their selection to include SBA loans. Visit their website to find out more if you’re interested in applying for an SBA loan using PayPal.
The SBA grant program, also known as the Economic Injury Disaster Loan (EIDL) advance, was created to give small businesses affected by COVID-19 up to $10,000 in emergency cash. The program is still active, but there are a certain number of monies available, and they are given out in a first-come, first-served order. It would be wise to submit an application for the grant right away if you haven’t already.
Yes, provided the payment is for work you completed before to the COVID-19 epidemic, you are permitted to pay yourself out of EIDL money. However, you are unable to pay yourself for labor done after the epidemic started using EIDL funding. EIDL funding cannot be used to cover personal debts or expenses, either.
You must give basic information about your company, such your business name and address, tax identification number, and ownership structure, in order to qualify for an EIDL loan. Additionally, you will be required to give financial data including your earnings, cost of products sold, and overhead costs. A personal financial statement or a copy of your tax returns may also be required by the SBA.
In conclusion, loans from the SBA and PPP are both crucial tools for small firms in these trying times. Even though their goals are different, both loans have a lot to offer struggling firms. As usual, do your research and consult with a reputable lender to be sure you’re picking the right course of action for your company.
Yes, PPP loans are still accessible. There was still about $100 billion in funding remaining as of March 7, 2021, and the program was extended through May 31, 2021. It’s crucial to keep in mind that the program’s funding may run out before the deadline, so companies should apply as soon as feasible.