COVID - 19 Business PPP VS EIDL

COVID - 19 Business Resource Center


Second Round of Federal Funding 

Congress Approved a second round of funding for Paycheck Protections Program (PPP) and the Economic Injury Disaster Loan (EIDL). SBA is working on reopening the applications. We encourage you to prepare your application in anticipation of the reopening date.

Paycheck Protection Program loans have already provided Colorado’s small businesses, nonprofits and independent contractors over $7B of payroll loans through its initial round of funds. EIDL recipients throughout the state have also secured critical low interest loans from the SBA. The second round of funding enables more Colorado PPP and EIDL applications to move forward. 

The additional $320B appropriation for PPP includes specific allocations for small financial institutions and community credit unions while also providing funds for minority owned businesses. These forgivable loans will be awarded on a first-come, first-served basis and Colorado businesses are encouraged to apply promptly.

The additional $60B appropriation for EIDL also allows Colorado businesses to resume seeking low-interest recovery loans from the SBA.

Statewide, this program stands to benefit more than 600,000 businesses, nonprofits and gig workers so we encourage eligible program participants to seek these payroll loans at your local lending institutions.

 Consider these next steps when applying for the Paycheck Protection Program:

  • Verify your Business’s Eligibility.
  • Review the application and gather the necessary materials such as payroll tax filings, proof of lease payments, proof of mortgage payments, and proof of utility payments.
  • Get in contact with your accountant and/or bank that pays out your business’s payroll. Ask your lender if it is authorized to process your Paycheck Protection Program loan. If you are not connected to an authorized lender, Find Eligible Lenders.
  • If your PPP loan was already in the queue at a bank, check in with your lender to ensure all paperwork is correct and in place.

Consider these next steps when applying for the Economic Injury Disaster Loan:

  • Verify eligibility through SBA’s online portal. SBA put together an EIDL Application Guide to walk you through the application process.
  • Gather necessary materials such as your business’s most recent tax return, owner’s/GP’s personal financial statement, and schedule of liabilities.
  • Apply through SBA SBA put together an EIDL Application Guide to walk you through the application process.
  • If you EIDL application was already submitted, check the status of your application by contacting SBA at 1-800-659-2955 or disastercustomerservice@sba.gov

Other Steps:

  • Self-employed, sole proprietors, independent contractors should confirm that their bank is working with their business structure.
  • Set up a bank account if you do not have one. This will be necessary to receive relief funds.
  • Prepare your paperwork, including average monthly payroll calculation. (inclusive of eligible health care and retirement contributions).
  • Create a plan for the use of funds over the 8-week period.
  • Ensure that the 8-week disbursement plan complies with approved program expenditures to maximize your loan forgiveness.
  • Reach out to your accountant for guidance and support to resolve any lingering questions that could delay your loan application when the lending windows open with additional Congressional appropriations.

Information provided by the Colorado Office of Economic Development and International Trade

PPP Versus EIDL: Can and should I apply for both?

Borrows can apply for both an SBA Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP) loan. However, PPP loan funds and EIDL funds cannot be used for the same purpose. 

If your EDIL is/was NOT used for payroll costs, it does not affect your eligibiltiy for a PPP loan.

If your EIDL is/was used for payroll costs, your PPP loan must be used to refinance your EDIL.

  • PPP’s maximum loan amount is $10 million with a fixed 1% interest rate and a maturity of two years.
  • EIDL’s maximum loan amount is $2 million with an interest rate at 3.75% for businesses and 2.75% for non-profits and a maturity of up to 30 years.

If you are applying for both, you can accept PPP first before deciding whether to close on your EIDL approved loan. You have 60 days after approval to decide whether or not to close your EIDL loan. Borrowers who accept both loan funds should document the uses of the funds appropriately.

Other considerations:

  • At least 75% of PPP funds must be used for payroll for it to be eligible as a forgivable loan. The remaining funds can be used for different purposes.
  • Any advance up to $10,000 on the EIDL will be deducted from the loan forgiveness amount of the PPP loan.
  • The application period for PPP loans run through June 30, 2020, but the EIDL application period runs through December 31, 2020. If you have working capital need beyond what is provided by PPP, you can apply for additioanl assistance through the EIDL program later on.

COVID-19 Business Survey

We have removed the requirement to register to submit your answers. We apologize for any inconvenience it caused. As a reminder, your responses are confidential. 

Thank you to all the businesses who have completed the survey. Your insights are valuable and will help the State make informed decisions moving forward.

Resources are available to support small businesses, non-profits, freelancers, and independent contractors. 

Second Round of Federal Funding 

As Colorado awaits the anticipated second round of federal funding to reopen applications for the Paycheck Protections Program (PPP) and the Economic Injury Disaster Loan (EIDL), we recommend you continue preparing to submit an application. Consider these steps:

  • If your PPP loan was already in the queue at a bank, check in with your lender to ensure all paperwork is correct and in place.
  • If you EIDL application was already submitted, check the status of your application by contacting SBA at 1-800-659-2955 or disastercustomerservice@sba.gov
  • If you have not started working with a bank yet, research available lenders to identify your potential provider. Find Eligible Lenders
  • Self-employed, sole proprietors, independent contractors should confirm that their bank is working with their business structure.
  • Set up a bank account if you do not have one. This will be necessary to receive relief funds.
  • Prepare your paperwork, including average monthly payroll calculation. (inclusive of eligible health care and retirement contributions).
  • Create a plan for the use of funds over the 8-week period.
  • Ensure that the 8-week disbursement plan complies with approved program expenditures to maximize your loan forgiveness.
  • Reach out to your accountant for guidance and support to resolve any lingering questions that could delay your loan application when the lending windows open with additional Congressional appropriations.

Information provided by the Colorado Office of Economic Development and International Trade