Differences Between an SBA Disaster Loan and a Paycheck Protection Program Loan

There are now two major federally funded loan programs for business owners impacted by the COVID-19 crisis: Small Business Administration Disaster Loans (Emergency Economic Injury Disaster Loan Assistance or EIDL loans) and the Paycheck Protection Program, part of the $2 trillion CARES Act, approved on Friday, March 27. 

We have outlined the programs below, so that you can understand the differences between the two programs.

See below for important updates as of April 1.

Here is the link to apply for the SBA Disaster Loan: https://www.sba.gov/funding-programs/disaster-assistance.

As of March 30, this applications has been simplified and streamlined. You no longer need to submit supporting documentation.


The Treasury Department has released additional information on the Paycheck Protection Program, see here.

Treasury website

Program overview

 Detailed fact sheet  


You need to apply for the Paycheck Protection Program through your bank and can apply starting on April 3. Contact your bank and ask if and how they will be accepting applications. It's likely banks will set up online portals.  

The Treasury is indicating that you must use 75% of the proceeds for payroll related costs, due to the anticipated demand.

Payroll costs include:

1) Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee)

2) Employee benefits including costs for vacation, parental, family, medical, or sick leave;allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit

3) State and local taxes assessed on compensation; and

4) For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee.

Email us at info@hughesklaiber.com if you would like to receive updates as we hear of bank lenders who are accepting applications for the Paycheck Protection Program.

Also see our article, Financing and Loan Options to Weather the COVID-19 Crisis.

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