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COVID-19 EIDL and the Paycheck Protection Program (PPP) treated forgiveness very differently: a standard COVID EIDL was a repayable SBA loan, while eligible PPP loan amounts could be forgiven if borrowers met the program’s requirements and received approval. Both programs are closed to new applications, but existing borrowers may still have payments to make or a PPP forgiveness request to resolve. Your signed loan note, account record, and SBA or lender notices determine your individual status.
How COVID EIDL and PPP differed
COVID-19 Economic Injury Disaster Loans (EIDL) were issued directly by the Small Business Administration (SBA) to provide working capital and cover ordinary operating expenses. PPP loans were issued by participating lenders with SBA backing and were designed mainly to support payroll. The programs had different application rules, uses, servicing arrangements, and forgiveness options.
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| Feature | COVID-19 EIDL | Paycheck Protection Program (PPP) |
|---|---|---|
| Who issued the loan | Directly from the SBA | Through a participating lender, with SBA backing |
| Main purpose | Working capital and ordinary operating expenses | Primarily payroll, plus specified eligible expenses |
| Forgiveness | The standard loan had to be repaid; it was not a forgiveness program | Eligible amounts could be forgiven if program conditions were met and forgiveness was approved |
| Published interest rate | Fixed 3.75% for businesses and 2.75% for private nonprofits | 1% |
| Published repayment term | Up to 30 years | Two years for loans issued before June 5, 2020; five years for loans issued later |
| New applications | Closed; the SBA stopped accepting COVID-EIDL applications on January 1, 2022 | Closed; the program ended May 31, 2021 |
| Where to check status | SBA Loan Portal and loan-specific SBA servicing notices | SBA Direct Forgiveness Portal or the lender that issued the loan |
These are published program terms, not a substitute for an individual loan agreement or servicing record. For official program descriptions, see the SBA’s COVID-era programs, About COVID-19 EIDL, and First Draw PPP loan pages.
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COVID-19 EIDL: the loan must be repaid
The standard COVID-19 EIDL was a loan, not a grant, and the SBA says it must be repaid. Eligible uses included working capital and ordinary business expenses such as payroll, rent or mortgage, utilities, other operating expenses, and certain business-debt payments. Using the funds for an allowed expense did not make the loan forgivable.
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An EIDL Advance was separate assistance, distinct from the EIDL loan balance. Do not assume an advance and the loan have the same repayment treatment; check your SBA account and loan records to identify what you received. The SBA’s COVID-19 Economic Injury Disaster Loan page describes the program and its loan terms.
PPP: forgiveness depended on eligibility, use, and approval
PPP borrowers could seek forgiveness for eligible amounts if they complied with the rules that applied to their loan. Payroll costs were central; specified additional covered costs included mortgage interest, rent, and utilities. Borrowers should apply only for amounts supported by the applicable program requirements and records. Forgiveness is not automatic merely because a borrower spent the money on payroll or another eligible category: the SBA or lender must process the request and confirm the outcome.
The SBA says borrowers may request forgiveness after using the proceeds they want forgiven. For loans of $150,000 or less, Form 3508S does not require supporting documents to be submitted with the application, but borrowers should retain records in case of review. Larger loans use forms with supporting-documentation requirements. Check the SBA’s PPP loan forgiveness guidance for forms and instructions that apply to your loan.
Who was eligible—and can anyone apply now?
Neither COVID-19 EIDL nor PPP is open for new applications. Their eligibility rules matter now mainly for understanding a past loan or forgiveness decision, not for applying for pandemic funding.
- COVID-19 EIDL: The program served eligible small businesses, agricultural businesses, and nonprofit organizations affected by the COVID-19 disaster.
- PPP: Eligible applicants included qualifying small businesses, sole proprietors, independent contractors, self-employed people, and specified nonprofit or other entities. Size, employee, and draw-specific requirements applied.
A separate disaster EIDL program still exists for certain small businesses, small agricultural cooperatives, and most private nonprofits in a declared disaster area that have suffered substantial economic injury. That program is distinct from the closed COVID-19 EIDL application window; see the SBA’s current Economic Injury Disaster Loans information.
What COVID EIDL borrowers need to repay and check
The SBA published COVID-EIDL terms of up to 30 years, with a fixed 3.75% rate for businesses and 2.75% for private nonprofits. The initial two-year payment deferment did not stop interest from accruing. The SBA’s payment guidance says the first payment is due 30 months after the original note date, so use the date on your note and your account’s current due date rather than estimating from the date you received funds.
At the program level, collateral was required for loans above $25,000 and a personal guaranty above $200,000. Individual requirements and balances depend on the loan documents and account record.
Check your account and payment instructions
- Sign in to the SBA Loan Portal to review loan status, balance, amount due, and statements.
- Compare the portal information with your signed note and any servicing notices. Contact the SBA servicing center named in your correspondence if the records conflict or you have a delinquency, collection, or other account-specific notice.
- Follow the portal’s current payment directions. SBA guidance says it accepts electronic payments only for covered loans starting October 1, 2025; check the portal for instructions applicable to your account.
Payment assistance is not forgiveness
The SBA describes a payment-assistance option for eligible COVID-EIDL borrowers: a 50% payment reduction for six months, available once every five years. Its stated conditions include being current and less than 90 days past due when applying, having a business that is open and operating, and having no active bankruptcy for the borrower and owners. Check the portal for current availability and your eligibility. A reduced payment is temporary assistance; it does not cancel the remaining loan balance.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What PPP borrowers need to do about forgiveness and repayment
PPP loans carried a published 1% interest rate. The SBA lists a two-year maturity for loans issued before June 5, 2020, and a five-year maturity for loans issued later. A forgiven amount is no longer payable as a loan balance; any portion not forgiven remains subject to the loan’s repayment terms.
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If you did not apply for forgiveness within 10 months after the end of your covered period, payments were no longer deferred and repayment to the lender began. The SBA says borrowers may apply for forgiveness up to five years after the SBA issued the loan number. Because lenders issued PPP loans, contact your lender for loan-specific status unless the loan was purchased by the SBA and is serviced through its portal.
- Check whether your loan is already marked forgiven, partially forgiven, or still payable. Use the SBA Paycheck Protection Program information and its Direct Forgiveness Portal, or contact the lender that issued the loan.
- If forgiveness is not confirmed, ask the lender or portal what application route and form apply to your loan. The SBA Direct Forgiveness Portal became available to borrowers of all loan sizes effective March 13, 2024.
- Keep your application records and any decision or servicing notices. If a balance remains, confirm the amount and payment schedule directly with the lender or SBA servicer handling the account.
Do not treat an application submission, an eligible-use calculation, or the passage of time as confirmation that a loan was forgiven. Rely on a written decision or account status from the relevant SBA channel or lender.
When a borrower-specific notice changes the answer
Program-wide terms cannot determine whether a particular loan is delinquent, under review, subject to collection, or affected by a fraud-related hold. If you receive such a notice, follow the contact and response instructions in that notice and verify the account with the named SBA servicing office or PPP lender. Do not rely on general program descriptions to infer an individual outcome.
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