PPP, EIDL, ERPTC – Acronym Overload – What’s It All Mean?
PPP – Payroll Protection Program
The belle of the ball of the three programs is a LOAN with POSSIBILITY of forgiveness. Don’t forget, it’s a LOAN. A good loan with great terms, more especially the part where the LOAN may be forgiven if you follow the requirements and keep your documentation straight. And what do you know, we have the information on our PPP Loan Forgiveness Application post! Any amounts not forgiven will be repaid normally at 1% with duration of 2 years.
EIDL – Emergency Injury Disaster Loan
Again, this is a LOAN! Another loan with great terms but still a LOAN. The EIDL offers you deferred payments for a year interest free. The duration of the loan can be set for up to 30 years and will have a interest rate of 3.75% on the note.
EIDL Advance – Emergency Injury Disaster Loan Advance
When applying for the EIDL, there is a check box which must be ticked in order for you to apply for the “Advance”. The advance as the SBA calls it, is actually a GRANT (free money) which was written into the CARES Act. When applied for every business can get a maximum of $10,000 but this is usually dictated by how many employees you have and at $1,000 per employee.
ERPTC – Employee Retention Payroll Tax Credit
The longest of the acronyms and the least sexy one…ERPTC is a tax credit your business could receive after the fact in the form of a CREDIT on your second quarter 941. You have to choose between this and the PPP which includes wages, taxes, payroll servicing fees, mortgage interest or rent, and basic utilities. In contrast with ERPTC, which ONLY includes federal payroll taxes incurred in the second quarter. No wonder ERPTC is still sadly waiting by herself for a dance…