It’s a very scary time right now if you’re a small business trying to stay afloat. In Seattle, we’ve seen some business who were already struggling financially close their doors for good. Other businesses are trying to take advantage of economic stimulus options available to them, but are uncertain even with the help if they will ever be able to open their doors again. There is a lot of confusion out there regarding what options are available to small businesses, self-employed individuals, and independent contractors. I want to highlight the two main options available from the U.S. Small Business Administration (SBA), which are the Economic Injury Disaster Loan (EIDL) and the Paycheck Protection Program (PPP).

Economic Injury Disaster Loan

EIDLs are loans provided by the federal government through the SBA. They have been around for a long time for companies that have suffered due to federally declared disasters. The loan you have probably been hearing about a lot on the news lately is the EIDL that is specifically tailored to the COVID-19 crisis. The purpose of this loan is to provides vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing as a result of the COVID-19 pandemic.

This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by COVID-19.

As part of the COVID-19 EIDL, there will be up to a $10,000 loan advance to small businesses that are eligible to apply and have applied. If you are eligible to apply and submit an application, but don’t get approved for the loan, then you will be eligible for a loan advance of up to $10,000 that does not have to be repaid. This amount also does not have to be repaid if you are approved for the EIDL loan, with a maximum possible loan amount of up to $2 million.

You can apply for the loan directly through the SBA website, by going to the following link and clicking the apply link at the very bottom of the page:

Paycheck Protection Program

The PPP is another option available to small businesses, with the primary purpose of helping companies afford their payroll costs when they keep employees on their payroll versus laying them off. The proceeds of this loan must be mostly used to cover payroll costs, but a portion can also be used for rent, mortgage interest, and utilities. The best part about this loan is that it is forgivable if the loan proceeds are used to pay for these costs over an 8 week period and assuming they meet all other requirements.

The big difference between this loan and the EIDL is that the PPP must be applied for through a third-party lender that offers section 7(a) small business loans backed by the SBA. It’s best to reach out to a bank where you already have an existing relationship, because existing customers are getting priority in some cases. The federal government has approved about $350 billion for these loans, but if that amount runs out, President Trump has stated that he will go back to Congress and try to request more funds for the program.

The direct SBA link with more information about the PPP can be found here:


There are many details of these programs that must be adhered to in order to apply correctly, and there are many other programs out there provided by companies, states, and local municipalities to help struggling small businesses during the COVID-19 crisis. Your best bet is to reach out to a CPA or financial advisor with knowledge of the options available to you so that your business can get the help it needs to stay afloat until the economy rebounds.