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Economic Injury Disaster (EIDL) Loans VS Paycheck Protection Program (PPP) Loans: What’s The Difference?

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Shannon Vissers

Shannon Vissers

Shannon is a writer and editor based in San Diego, CA. Shannon attended San Diego State University, graduating in 2005 with a BA in English. She is the former editor-in-chief of SteelOrbis, an online trade publication. Shannon has also published articles for LIVESTRONG.COM, eHow, Life'd, and other websites. She has been with Merchant Maverick since 2015, writing about POS software, small business loans, and financing for women entrepreneurs.
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36 Comments

Responses are not provided or commissioned by the vendor or bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the vendor or bank advertiser. It is not the vendor or bank advertiser's responsibility to ensure all posts and/or questions are answered.

    Gina

    My EIDL aplication seems to be taking a long time, what is the usual time frame

      Jessica Dinsmore

      Hi Gina,

      Thank you for your question! Most EIDL applicants will receive a funding decision within 21 days. If you’re approved, you should get a disbursement within a week of approval. You can read more about the process in our SBA EIDL Funding Timeline: What To Expect During Application, Approval, & Processing.

        JOHN Caputo

        I’m a taxi driver and got the SBA IDL as a solepropietor, can I get this loan forgiven?

          Erica Seppala

          Hi John!

          If you received the SBA EIDL, this is a loan and it is not forgivable. It will need to be repaid. However, if you received an EIDL Advance, this is a grant that is forgivable and does not have to be repaid.

            Sam Smith

            i had a cleaning self employed service before corvid but, that was affected due to the pandemic. Applied for PPP and was approved for $2500 which is nothing. I want to extend my business into printing and selling shirts can EIDL help in some way.

              Erica Seppala

              Hi Sam!

              Unfortunately, EIDL funds can only be used for day-to-day operating expenses and financial obligations. EIDL funds can’t be used to expand your business with additional products. However, there are a number of other resources you can consider. Check out our COVID-19 Relief portal or consider looking into other SBA loans, such as the 7(a) loan program which has more flexibility in terms of how you use funds. Good luck!

                Chuch

                Hello, you stated “ The EIDL loan itself is not forgivable unless you later roll it into a PPP loan, a portion of which may be forgivable”. What determines how much of the rolled over amount is forgivable? Thanks, Chuck.

                  Jessica Dinsmore

                  Hi Chuck,
                  The forgivable amount of the EIDL is essentially the amount spent on PPP-eligible expenses, i.e., payroll. However, this exception only applies to applicants who received an EIDL between January 31, 2020 and April 3, 2020. This post on EIDL forgiveness may help clarify.

                    Paola A Aleman

                    I am the owner of small insurance agency and on 5/4/2020 I was funded 11,925.00 with a PPP loan. Which I was able to use for about 5 payrolls. Later I applied for an EIDL loan which was funded on August 27, for $6000. I have used this loan for rent, utilities and payroll expenses. Will both amount be forgiven?

                      This comment refers to an earlier version of this post and may be outdated.

                      Jessica Dinsmore

                      Hi Paola,

                      It sounds like you’ve utilized the funds as intended. The PPP is forgivable as long as it’s used for qualifying expenses. The EIDL however, is not. If you received an advance/grant that portion does not need to be repaid, but the loan portion will. The only exception is if it is rolled into a PPP loan. I hope that helps!

                        This comment refers to an earlier version of this post and may be outdated.

                        zach

                        Hello, so when the Eidl loan is “rolled over” to the PPP loan does that mean it also deducts those funds from your PPP? Just want a little confused on what the “rolling over”

                          Jessica Dinsmore

                          Hi Zach!
                          It means that the “rolled over” portion of the EIDL will be forgiven along with the rest of your PPP. (As long as you meet the requirements, i.e., you spent it on payroll). So in a sense, it actually adds those funds to your PPP and subtracts them from the amount of the EIDL you’ll have to repay.

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