The Small Business and the Payment Protection Plan Deadline Extension Explained by the Family Business Fund

BOCA RATON, Fla., April 5, 2021 (Newswire.com) - President Biden recently signed the Payment Protection Plan (PPP) Extension Act, which extends the application deadline for this program to May 31, 2021. Determining whether or not the PPP loan or Economic Injury Disaster Loans (EIDL) is right for a small business can be difficult. Read on to discover what is the purpose of each loan and how companies can benefit from them.

PPP vs. EIDL

EIDLs are meant to help small businesses cover their operational expenses for six months, while the primary purpose of PPP loans is to cover eight weeks of payroll expenses. Both options are available for small businesses. (Use the Small Business Administration's size standards tool to determine if a company is considered a small business.)

SBA Paycheck Protection Program Highlights

• Maximum loan amount: $10 million
• Forgivable: the loan is forgivable if 60% is spent on the business' payroll expenses
• Collateral: there are no collateral or personal guarantees required
• Credit check: there is no credit check required
• Payment deferral: if the loan is not forgiven, the first payment can be deferred for up to 10 months after the last day of the covered period
• Apply through an approved lender
• Terms: if the loan is not forgiven, there will be 1% interest
• Loan uses: the loan may be used for payroll expenses, rent, mortgage interest, and utilities

SBA Economic Injury Disaster Loans Highlights

• Maximum loan amount: $500,000
• Forgivable: the loan is not forgivable
• Collateral: loans that exceed $25,000 must be secured by collateral to the extent possible, and if the business has no collateral to pledge, assets of the business owners may need to be pledged as collateral
• Credit check: decent credit needed to qualify for this loan
• Payment deferral: the first payment can be deferred for up to 12 months
• Apply through the SBA website
• Terms: pay 3.75% interest for up to 30 years or 2.75% if the business is a non-profit
• Loan uses: the loan can be used for fixed debt, payroll, accounts payable, and bills that could have been paid had the disaster not occurred

For help navigating these options or alternative funding opportunities, please contact the Family Business Fund and discover how to get started on the road to continued success.

About Family Business Fund

The Family Business Fund was founded in 2018 to help ensure that small businesses have access to the resources needed to thrive. Founded by small business owners for small business owners, we provide alternative funding to small and mid-sized businesses in need. For more information, contact Douglas Muir at [email protected] or call (888) 884-6442 ext. 3.

Source: Family Business Fund