updated August 2021
What is the CARES Act?
In response to the Coronavirus (COVID-19) pandemic, the U.S. Small Business Administration currently provides financial assistance to small businesses through the Economic Injury Disaster Loans (EIDL) and the Paycheck Protection Program (PPP).
Economic Injury Disaster Loans (EIDL)
A low-interest long-term loan
EIDLs are loans of up to $2 million with a 3.75% interest rate for businesses and a 2.75% interest rate for nonprofits with terms of up to 30 years.
Paycheck Protection Program (PPP)
A loan program that provides loan forgiveness for retaining employees
The PPP is a 100% federally guaranteed loan to help small businesses keep workers on payroll for a period of 8 to 24 weeks during this crisis. The loans can be up to $2 million with a 1.0% interest rate with a term of five years. It will be fully forgiven if at least 60% of the entire loan is allocated towards payroll, remaining funds are used for eligible uses, and employment and compensation levels are maintained.
NOTE: Borrowers may apply for both loan options as long as there is no duplication in the uses of funds
| LOAN TERMS | ECONOMIC INJURY DISASTER LOAN (EIDL) | PAYCHECK PROTECTION PROGRAM (PPP)* *The Paycheck Protection Program ended on May 31, 2021. Existing borrowers may be eligible for PPP LOAN FORGIVENESS. |
| Program Type | Loan | Forgivable Loan |
| Who is Eligible |
* Businesses in certain industries may have more than 500 employees if they meet the SBA’s Size Standards |
* Either the industry based sized standard or the alternative size standard of 500 or less employees |
| Eligible Uses | fixed debts (rent, etc.), payroll, accounts payable, and other operating expenses | Payroll costs including benefits as well as mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, and certain supplier costs and expenses for operations. |
| Interest Rate | 3.75% for small businesses and 2.75% for nonprofits | 1% |
| Loan Size | up to $2 million | up to 2.5 x average monthly payroll cost for up to $2 million up to 3.5 x average monthly payroll for Accommodation and Food Services sector |
| Loan Term | up to 30 years | 2 years (loans issued prior to June 5) - 5 years (loans issued after June 5) |
| Repayment Deferral | 12 months | Deferred for borrowers who apply for loan forgiveness until SBA remits the borrower's loan forgiveness amount to the lender. If a borrower does not apply for loan forgiveness, payments are deferred 10 months after the end of the covered period for the borrower’s loan forgiveness (either 8 weeks or 24 weeks). |
| Fees | none | none |
| Collateral | no collateral is required for loans of $25,000 or less | none |
| Personal Guarantees | up to $200,000 can be approved without a personal guarantee | none |
| Forgivable portion | up to $10,000 grant if used for authorized reasons (advance funds have been fully allocated and are not currently available) |
all IF at least 60% is used on payroll and remainder on eligible uses (also based on employer maintaining/rehiring employees and maintaining salary levels) |
| Expiration Date | Rolling | June 30, 2021 |
Ready to Apply? |
APPLY for EIDL |
APPLY for PPP *NOTICE: the Paycheck Protection Program (PPP) ended on May 31, 2021. Existing borrowers may be eligible for PPP Loan Forgiveness. |
Need Help Applying for SBA Loans?
Contact the LA County Business and Worker Disaster Help Center
- Visit: LACountyHelpCenter.org
- Call: 833-238-4450
- Engage on social media: @LACHelpCenter on Twitter, Facebook, and Instagram
- Email: This email address is being protected from spambots. You need JavaScript enabled to view it.
For assistance applying for a City or State loan, please contact a BusinessSource Center for phone and email support.
return to COVID-19 Resources