The Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP) are two different programs funded by the CARES ACT, which includes stimulus funds in the form of loans and grants for America’s small businesses.
The two loans share a lot of similarities but also have some important differences.
The EIDL is a loan of up to $2 million (depending on how much you’re approved for) meant to help businesses cover six months of operational expenses. You do have the pay the money back, eventually. However, EIDL loans also include a $1,000 to $10,000 cash advance, which does not have to be repaid — even if you are ultimately rejected for the EIDL loan.
PPP loans can also be used for operational expenses, but their primary purpose is to cover eight weeks of payroll; you need to spend at least 60% of the loan on payroll expenses.
You can also use a portion of the loan to cover the mortgage, rent, or utility expenses.
PPP loans can be as large as $10 million (depending on your payroll expenses) and will be forgiven as long as you follow all the rules (more on that in a bit).
You can apply for and receive both loans as long as you meet the qualifications for both loans and use the loan proceeds on different things. For example, you can use the PPP for payroll and the EIDL to cover other operational expenses.
