What’s the difference between EIDL & PPP

Many businesses received funding via the PPP or EIDL or both. One question I get asked often from business owners is how to know what type of funding they received. Here’s a short tutorial on each funding type, the application process, and the funding process.

PPP – Paycheck Protection Program

Funding for this program was not directly through the SBA but rather lenders such as your local bank. If you received a PPP loan you would have applied directly with your bank or other PPP approved lenders such as Paypal or Intuit. Funding would have been deposited into your bank account after completing an application most likely via your lender’s website. The approved funding amount was based on your payroll expense for 2019.

EIDL Emergency Grant/Advance

EIDL stands for Economic Injury Disaster Loan and is administered directly by the SBA.

The EIDL Grant is sometimes referred to as the EIDL Advance. They are the same thing. When applying for the EIDL Loan there was an option to request the Advance of $1,000 per employee up to a maximum of $10,000. This application would have been completed directly on the SBA website. If you requested the advance it would have been deposited directly into your bank account. You were not requested to complete any other forms to receive these funds.

You could have received the EIDL advance and not the Loan (see below). As well, since the advance was directly deposited in the requester’s bank account there is a chance you may have missed it. If you remember applying for this but don’t remember seeing it deposited be sure to check your bank statements. I have seen this scenario many times. If you received this advance it’s important to record it correctly in your accounting system.

EIDL Loan

If you received an EIDL Loan, chances are this process will sound familiar. For this loan, you would have applied directly on the SBA website and completed a loan application. After the SBA reviewed the application they emailed you either loan approval or loan rejection. If your loan request was approved you would have been directed to log in to your profile and electronically sign the loan paperwork. At this time you also had the chance to either approve the full loan amount or request a lower amount. After all steps were completed the funds would have been deposited into the bank account listed on the application.

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Check out this article for a step-by-step guide on how to enter the various funds in your accounting system.

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~ Brandon & Christi are successful business owners who enjoy traveling and making a mess in the kitchen with their two daughters. They reside in the Dallas, TX suburbs and work with businesses throughout the U.S.

The article is for informational purposes only and should not be construed as business, accounting, tax, or legal advice. Details are subject to change without notice.

Be sure to consult with your tax professional.