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

    Shannon Vissers
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Shannon Vissers

Shannon Vissers

Expert Analyst & Reviewer at Merchant Maverick
The former editor-in-chief of SteelOrbis, Shannon has been researching and writing about small business software and financing since 2015. Her shopping and retail expertise has been cited in numerous publications, including Reader's Digest, MSN, Yahoo Finance, and GOBankingRates . She has also published articles for LIVESTRONG.COM, eHow, Life'd, and other websites. Shannon attended San Diego State University, graduating in 2005 with a BA in English.
Shannon Vissers
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    I received a EIDL loan on July 7th 2020. I see where those can be rolled over to a PPE loan and possibly forgiven, or at least a portion of it. Is that still an option for me at this point?
    Thank You!!

      Erica Seppala

      Hi Heidi!

      It was true that in certain situations, PPP loans could be used to refinance EIDL loans. However, the PPP program ended on May 31, and applications are no longer being accepted, so unfortunately this is no longer an option. Good luck!

        Dianne Williams

        Hi Reply,
        I have filled out the application and was approved for both 1st and 2nd draw. I have received the 1st and applied for the forgiveness. Am i not eligible for the second draw even if i was already approved for it?

        Thank you

          Erica Seppala

          Hi Dianne!

          The PPP program ended on May 31. However, some lenders did set aside funds for loans that were already approved. If your second draw was approved prior to the end of the program, I would contact your lender directly to find out more information about your specific situation. Good luck!

            Danielle Gragson

            I applied for a ppp loan on 4/28 and didn’t get my funding till after the program ended. Since I won’t be able to get my 2nd draw ppp loan cause the program ended will I qualify for an eidl loan ?

              Erica Seppala

              Hi Danielle!

              I’m sorry to hear that you will be unable to receive a PPP Second Draw. While you can certainly apply for an EIDL loan, it is important to note that these are two different loan programs with their own separate requirements. While you may have qualified for PPP, you may not necessarily qualify for EIDL.

              If your business falls under the SBA’s definition of a small business and you meet credit requirements, you may be approved for an EIDL loan. If you feel you meet these requirements, you can certainly move forward with your application. You can apply directly through the SBA. One last thing to remember is that while the PPP was 100% forgivable if used for qualifying expenses, the EIDL loan will need to be repaid over time, so this is something to keep in mind. Good luck!


                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!


                            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.


                                    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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