I’ve talked to a lot of investors that have been a little confused about the difference between the PPP, and the EIDL. I thought I just take a minute to convey my understanding.
Based on the information available to me, the EIDL is not forgivable. The advance that is tied to the EIDL, is a grant in essence. The SBA’s website states the advance does not have to be repaid. The SBA is processing EIDL applications on a first come first serve basis. If you are one of the few that will finally get through to a loan process, you will most likely receive a working capital loan based off of 3 to 5 months of documented revenues and expenses. If you get to this point, and accept the loan, it will have to be repaid.
If you have not already applied for and received an approval of your PPP loan, I really don’t think there’s much point to trying now. This is basically corporate welfare, where the government offered hundreds of billions of dollars of free money that never has to be repaid as long as you check a couple boxes. I found a really helpful matrix from the Association of International Certified Public Accountant’s. Click here to follow that link. It will help you understand what you need to do to make sure your PPP loan is forgiven. Here is a excerpt:
PPP Loan Forgiveness As of 4/24/2020
As businesses who received a Paycheck Protection Program (PPP) loan look forward to maximizing their loan forgiveness, the following outlines the steps to take for PPP loan forgiveness. Look over these steps now to prepare for maximum loan forgiveness at the end of the 8-week covered period.
I hope you all are having a great time on your extended vacations! As for me, I’m about to go insane. We are ramping up buying, and I think we’re going to have a really strong winter. Take care, and stay in touch.